Stocks slide to 5-month lows amid global sell off as trade war escalates

Investors lost around Rs 1.57 lakh crore in market valuation on Friday.

The BSE Sensex plunged by about 410 points to close at a five-month low while the broader Nifty crashed below the 10,000 mark for the first time this year following a global sell-off due to fears of a trade war as US President Donald Trump announced tariffs on Chinese goods.

The 30-share Sensex tumbled by 409.73 points or 1.24 per cent to close at a five-month low of 32,596.54, a level last seen on October 23 last year.

The 50-issue Nifty ended below the psychological 10,000-level by dropping 116.70 points or 1.15 per cent to 9,998.05, the lowest closing level in five months. The level was last seen on October 11 last year, when it had closed at 9,984.80.

Investors lost around Rs 1.57 lakh crore in market valuation on Friday.

For the fourth straight week, the flagship Sensex recorded a fall of 579.46 points, or 1.75 per cent, while the NSE Nifty lost 197.10 points, or 1.93 per cent.

Realty, metal, bankex, capital goods, healthcare, PSU, auto and oil & gas stocks recorded widespread losses.

Metal stocks led by SAIL, Jindal Steel, Vedanta, Hindalco Ind. Jindal Steel, National Aluminium, Hindustan Zinc, Tata Steel, NMDC and JSW Steel fell up to 6.58 per cent due to intense selling pressure.

Banking stocks took a hit after Totem Infrastructure was booked by the CBI for allegedly defrauding a consortium of eight banks led by Union Bank to the tune of Rs 1,394 crore.

The Nifty Bank index fell 471.10 or 1.95 per cent to close at around eight-month low of 23,670.40 as Axis Bank, PNB, Yes Bank, Canara Bank, ICICI Bank, IDFC Bank, SBI, Bank of Baroda, HDFC Bank, Kotak Bank, Federal Bank and IndusInd Bank dropped up to 3.87 per cent.

Union Bank of India also ended lower by 8.29 per cent to Rs 86.85 amid concerns over losses incurred in a Rs 1,394-crore loan fraud case.

Investor sentiment turned extremely bearish, in line with sharp losses on the Wall Street, Asian and European markets, on growing fears of a global trade war after Donald Trump imposed tariffs on Chinese imports and Beijing drawing up a list of retaliatory measures, brokers said.

The markets opened with a negative bias as global trade war tensions intensified after US President Donald Trump ordered at least $50 billion in tariffs on Chinese imports and China announced plans for reciprocal tariffs on $3 billion of imports from the US, Anand Shah, deputy CEO & head of investments - BNP Paribas Mutual Fund said.

Vinod Nair, head of research, Geojit Financial Services Ltd said, "Volatility expanded and market is losing its grip due to escalating tensions of trade war and spike in oil prices."

"Market corrected 10 per cent from its peak while metal & PSU banks continue to be the laggards.

“We expect domestic chaos to stabilize as pressure of redemption will be over by the end of FY18 but pre-election volatility may take some time."

In the Sensex kitty, Tata Motors, L&T, Bajaj Auto, Dr Reddy's RIL, Wipro, HDFC, Sun Pharma, Heromotocorp, HUL, Maruti Suzuki, Bharti Airtel, ONGC, ITC, TCS and NTPC, lost up to 2.10 per cent.

IT and media stocks, however, posted gains. Adaniports, Infosys, Powergrid, M&M, Coal India and Asian Paints ended in the positive zone, gaining up to 0.99 per cent.

The sectoral indices led by realty fell 3.31 per cent, metal 2.89 per cent, bankex 2.08 per cent, finance 1.73 per cent, capital goods 1.56 per cent, healthcare 1.48 per cent, PSU 1.30 per cent, energy 1.15 per cent, auto 0.85 per cent, oil & gas 0.85 per cent, infrastructure 0.84 per cent, power 0.68 per cent, FMCG 0.64 per cent and consumer durables 0.08 per cent.

While, teck and IT indices ended in the positive zone with gains up to 0.32 per cent.

In the broader market, the BSE small-cap index fell by 1.54 per cent while the mid-cap index shed 1.36 per cent.

Shares of Gitanjali Gems continued to be under selling pressure, falling 4.93 per cent to Rs 9.65.

In Asian region, Japan's Nikkei lost 4.51 per cent, Hong Kong's Hang Seng fell 2.45 per cent, while Shanghai Composite Index shed 3.39 per cent.

European markets were down in early deals. Paris CAC 40 was down 1.69 per cent, while Frankfurt's DAX lost 1.81 per cent. London's FTSE shed 0.85 per cent.

Photograph: Shailesh Andrade/Reuters