Mumbai, Oct 11 (IANS) Indian equities joined a global sell-off, as investors fretted trade tension between the United States and China will subdue economic growth around the world.
“The sell-off was in sync with the slide in Asian markets after a sharp fall in the US equities on Wednesday. Rising US interest rates, and US-China trade tension will likely hurt corporate profits,” Vinod Nair, Head of Research, Geojit Financial Services, told IANS.
International Monetary Fund head Christine Lagarde’s comments that stock market valuations had been “extremely high”, triggered the meltdown in the US markets, and spilled over to Asia on Thursday.
The equities rout and concerns that the US Federal Reserve would keep tightening its lending rates sparked capital outflows, pushing the rupee lower to its fresh low of 74.48 on Thursday.
The slide in the US and Asian markets damped risk-appetite, sending at one point the barometer index — S&P BSE Sensex — 1,000 points lower.
Heavy selling was witnessed in banking, IT, metals, auto and capital goods stocks. All 19 sector-based indices on the BSE, except the oil and gas index, traded in the red.
The stocks staged a slight recovery in the afternoon session, as some investors stepped up value-buying.
At 12.30 p.m., the broader Nifty50 of the National Stock Exchange traded at 10,257.35, down 202.75 points or 1.94 per cent from its Wednesday’s close.
“Nifty seems to be in a temporary bottom formation stage, which could last a few more session,” HDFC Securities Head of Retail Research Deepak Jasani said.
The S&P BSE Sensex, which had opened at 34,063.82 points, traded at 34,095.77, down 665.12 points or 1.91 per cent.
So far, the Sensex has touched an intra-day high of 34,156.88, and a low of 33,723.53.
Japan’s Nikkei 225 was quoting in the red, down about 4.37 per cent in the morning, while Hang Seng fell 3.95 per cent. South Korea’s Kospi declined 3.63 per cent.
China’s Shanghai Composite index was trading in the red, down by 4.74 per cent.
Overnight, Nasdaq closed 4.26 per cent lower, while FTSE 100 fell 1.29 per cent.
The rupee slipped to a fresh record low of 74.48 to a US dollar on Thursday morning after opening at 74.31 at the Inter-Bank Foreign Exchange Market. It had settled at 74.22 (74.2175) on Wednesday.
It made a slight recovery and around 12.25 p.m. stood at 74.40 (74.3950) to a US dollar on suspected RBI intervention.