The Telegraph
Stocks took a fresh round of hammering on the bourses on Tuesday after geopolitical tensions over the death of a Saudi journalist and apprehensions over Italy’s budget dragged benchmark indices Sensex and Nifty to their lowest levels in six months.
These fresh worries come at a time crude oil prices have fallen below the $80-per-barrel mark even as the rupee has remained steady against the dollar. Moreover, second-quarter results from corporate India have so far been a mixed bag.
The BSE index ended 287.15 points lower at 33847.23 — the weakest closing since April 10 when the 30-share gauge had settled at 33880.25. The NSE Nifty dropped 98.45 points to 10146.80 — its lowest closing since April 4. The rupee had depreciated to 73.82 intra-day against the dollar before settling at 73.57.
Global factors weighed heavily on the stocks. Apart from geopolitical concerns over the death of a Saudi journalist, investors continued to remain nervous over the impact of the trade war between the US and China.
More bad news came in as the European Commission rejected Italy’s budget and the latter saying it would not make any changes. While key indices in Europe were weak, the Dow Jones Industrial Average fell around 500 points but staged some recovery at the time of going to the press.
Investors at Wall Street were cautious ahead of a slew of earnings this week. Disappointing earnings from a couple of the companies were blamed for the sharp fall in the Dow Jones index on Tuesday.
“Profit booking in IT and pharmaceuticals stocks dragged the indices lower on Tuesday. These two sectors were holding their ground recently while the overall markets corrected. Investors chose to book some profits here as the tailwinds of a depreciating currency are slowing,” said V. K. Sharma, head private clients and capital markets group, HDFC Securities.
Provisional data from the stock exchanges showed foreign portfolio investors were net sellers worth Rs 340 crore on Tuesday.
Market circles are of the view that equities are likely to remain under pressure because of the global developments along with local developments such as the upcoming state elections and the general elections next year. Global brokerage Nomura on Tuesday downgraded the stocks of oil marketing companies, fearing populist measures by the government ahead of the polls.
Sensex 50
The BSE will introduce weekly futures and options contracts on Sensex 50 index from Friday. The bourse will introduce seven weekly futures and options contracts expiring on every Thursday of the week.
