Market rout continues on worsening global trade spat, rupee woes

The BSE benchmark Sensex extended losses for the second session Tuesday by plummeting 295 points to close at an over one-month low of 37,291 owing to hectic selling in financial and auto stocks amid escalating US-China trade tariff tensions and worsening rupee woes.

The broader NSE Nifty too fell over 98 points to crack below the 11,300-mark.

Besides, rising crude oil prices further dampened investors' mood.

The domestic currency was trading lower by 27 paise at 72.78 (intra-day) against the US dollar in late afternoon deals.

Globally, sentiments took a hit after US President Donald Trump Monday announced the imposition of new tariffs on an additional USD 200 billion worth of imports from China, escalating the trade war with the Asian giant.

Alleging that China has been unwilling to change its unfair trade practices, Trump said the new additional tariff structure would be effective September 24 from when it would be at 10 percent until the year-end but would increase to 25 percent level from January 1.

The 30-share Sensex opened Tuesday on a somewhat better note at 37,660.19 and advanced to touch a high of 37,745.44 but later turned choppy and hit a low of 37,242.85 as selling pressure gathered momentum towards the fag-end, before settling 294.84 points, or 0.78 percent, down at 37,290.67. This was the lowest closing since August 2 when it had settled at 37,165.16.

The 30-scrip gauge had lost 505.13 points Monday.

The 50-share NSE Nifty Tuesday plunged 98.65 points, or 0.87 percent, to end at 11,278.90. During the session, it moved between 11,411.45 and 11,268.95.

Domestic institutional investors (DIIs) sold shares worth Rs 180.36 crore, while foreign portfolio investors (FPIs) also offloaded shares to the tune of Rs 106.54 crore Monday, provisional data showed.

"In the near term, we continue to maintain a cautious stance on the markets as volatility and choppiness is likely to remain high led by uncertain global cues, crude oil price movement, depreciating rupee (vs dollar) and muted domestic sentiments. However any further correction at this juncture should be considered as a healthy buying opportunity for investors in quality companies with strong financials and bright outlook," an analyst commented.

SBI emerged as the biggest loser in the Sensex pack with its shares plunging 4.06 percent, while Tata Motors lost 3.36 percent on nervous selling after unit Jaguar Land Rover said it will cut output at a UK car plant after warnings on the impact of Brexit and diesel policy.

Other laggards were Bajaj Auto 2.84 per cent, Axis Bank 2.81 per cent, Bharti Airtel 2.31 per cent, ICICI Bank 2.07 per cent, Vedanta 1.94 per cent, NTPC 1.68 per cent, Maruti Suzuki 1.56 per cent, PowerGrid 1.41 per cent, HDFC Ltd 1.20 per cent, L&T 1.16 per cent, IndusInd Bank 1.13 per cent, Kotak Bank 1.11 per cent, Asian Paints 1.08 per cent, Adani Ports 1.02 per cent, Infosys 1.02 per cent and RIL 0.74 per cent.

Hero MotoCorp 0.66 percent, Sun Pharma 0.60 per cent, Tata Steel 0.52 per cent, Coal India 0.49 per cent, M&M 0.23 per cent and TCS 0.08 per cent also retreated.

Among the winners, HUL was the top performer, climbing 3.87 percent, followed by Yes Bank at 1.43 percent.

Wipro also rose 1.02 percent, ONGC 0.93 percent and ITC Ltd 0.23 percent.

The government Monday said state-owned Bank of Baroda, Vijaya Bank, and Dena Bank will be merged to create the country's third-largest lender.

Reacting to the development, shares of Bank of Baroda (BoB) cracked 16.03 percent and Vijaya Bank fell 5.69 percent. Dena Bank rallied 19.75 percent.

Sector-wise, the BSE realty index shed 3.13 per cent, followed by PSU (2.43 per cent), power (2 per cent), telecom (1.75 per cent), bankex (1.68 per cent), utilities (1.68 per cent), metal (1.49 per cent), auto (1.47 per cent), finance (1.42 per cent), capital goods (1.36 per cent), infrastructure (1.36 per cent), oil & gas (1.08 per cent), energy (0.92 per cent), teck (0.82 per cent), healthcare (0.72 per cent) and IT (0.70 per cent).

In the broader markets, the small-cap index fell 1.51 percent and the mid-cap gauge shed 1.49 percent.

Elsewhere in Asia, most markets ended higher. Hong Kong's Hang Seng rose 0.56 percent, Shanghai Composite Index up 1.82 percent and Japan's Nikkei gained 1.41 percent.

European markets too were trading positive in the early session. Frankfurt's DAX was up 0.54 percent and Paris CAC 40 too gained 0.60 percent. London's FTSE too moved up by 0.15 percent in late morning deals.