INSUBCONTINENT EXCLUSIVE:
NEW DELHI: Emergence of selling pressure threw benchmark indices off-balance on Monday
By 10.30 am, the BSE Sensex plunged over 400 points while NSE barometer Nifty tested the 11,400 mark as global trade war tensions made
investors lose their nerve
The government measures announced this past weekend, which are aimed at stemming rupee's fall and narrowing the current account deficit,
failed to sway the investors
Here are five major factors that unsettled the market on Monday.
US set to impose tariffs on ChinaA senior US administration official told
Reuters over the weekend that US President Donald Trump is likely to announce the new tariffs as early as Monday
An opinion piece in Global Times, the mouthpiece of the Chinese Communist Party, argued that while Washington is extending a carrot to
Beijing, it is also swinging a stick
Trade worries showed up in Asian markets such as China, Hong Kong, Korea and Taiwan, which have fallen up to 1.5 per cent so far.
Govt's
implicitly signaling that exchange rate stability will be maintained
Nevertheless, we believe that the rupee will continue to trade with a depreciation bias as these measures will not attract very large
The domestic currency today plunged 76 paise to hit 72.61 against the dollar
non-essential imports to contain the widening CAD and check the currency fall, failed to cheer the rupee.
Ajay Bodke, CEO for PMS at
Prabhudas Lilladher said that the measures announced signals the government's intent to stem the panic that had gripped the currency
That said, the the impact of most of the measures would be felt not immediately, but over the next few months, Bodke said
sectors and what has hampered indigenous development of sectors such as electronics and capital goods that has led to surge in their
imports, adversely impacting trade and current account deficit
Foreign outflows pick up paceA fall in the rupee hurts foreign investments and leads to foreign outflows
Data suggests that foreign portfolio investors (FPIs) withdrew a net Rs 4,318 crore from equities on September 3-14 while they pulled out Rs
5,088 crore of the debt market, taking their total outflows to Rs 9,406 crore this month
In absence of foreign flows, the market runs the risk of being overly-dependent on domestic flows, say analysts
Technical chart signals volatilityAnalysts noted that while a Hammer candle on the weekly scale was a positive signal till the index stays
below 11,600 level, volatility would go on.
The negative sequence of lower tops and bottoms is intact and the ongoing upmove could be in
As long as Nifty stays below 11,600 level, the negative sequence remains intact
