Manic Monday! Sensex falls nearly 500 pts as trade war fear grips markets

Bears took control of D-Street from the beginning of the trade and pushed the Sensex below 39,000 and Nifty below 11,700 towards the close of the trade on June 17 to register 1-month closing low.

Weak global cues, trade war fears, high valuations, rise in crude oil prices, delay in monsoon, and reduction in the flows from foreign investors were some of the factors that weighed on sentiment.

The final tally on D-Street – the S&P BSE Sensex fell by 491 points to 38,960 while the Nifty closed 151 points down at 11,672.

“Indian markets were falling under the pressure of macros. Liquidity crunch, escalating trade war concerns high valuations are weighing down on the D-Street. Indian markets have shown a divergent behaviour since the past couple of months with largecaps on the uphill and small and midcaps on a downhill,” Umesh Mehta, Head of Research, Samco Securities told Moneycontrol.

“However, on June 17, most of the largecaps faced the heat and stocks from a wide gamut of sectors, not only the financial space, were down,” he said.

In terms of technicals, Nifty formed a bearish belt hold pattern on daily charts for the second consecutive day in a row. The index also slipped below its crucial 50-day moving average placed at 11,681 for the first time since May 8, 2019.

Sectorally, the S&P BSE Metal index plunged over 3 percent, followed by the S&P BSE Oil & Gas index that was down 2.3 percent, the S&P BSE Telecom index, which was down 2.1 percent, and the Bankex that dipped 1.2 percent.

In the broader market space, the S&P BSE Midcap index was down 1.29 percent and the S&P BSE Smallcap index plunged 1.35 percent.

Stocks in news:

Aster DM Healthcare gained 5 percent after ICRA revised rating for the company’s total credit facility of Rs 168 crore.

Reliance Capital shares fell 6 percent despite the company selling stake in the group’s asset management company.

Varun Beverages shares shed 4 percent after the Board’s approval to bonus issue.

Piramal Enterprises said it has divested its entire stake in asset financing firm Shriram Transport Finance Company for approximately Rs 2,305 crore. Piramal Enterprises was down 3 percent and Shriram Transport plunged 6.1 percent.

Hexaware Technologies shares gained nearly 3 as Japanese brokerage Nomura upgraded to the company to ‘neutral’ from ‘reduce’ after the acquisition of Mobiquity.

Global update:

European markets are trading mixed ahead of US Federal Reserve meeting outcome this week.

Asian markets ended mixed ahead of Fed meeting outcome later this week. Shanghai Composite added 0.2 percent at 2,887.62, Nikkei ended flat at 21,124 and Kospi fell 0.22 percent at 2,090.73.Subscribe to Moneycontrol Pro and gain access to curated markets data, exclusive trading recommendations, independent equity analysis, actionable investment ideas, nuanced takes on macro, corporate and policy actions, practical insights from market gurus and much more.