Sensex drops tracking global cues; banks, autos drag
Indian shares dropped for a third straight session on Wednesday as banking and automobile shares fell, while regional markets were trading lower tracking overnight losses on Wall Street on doubts over U.S. President Donald Trump’s economic policies.
Asian stocks fell as doubts on Trump’s economic growth agenda prompted investors to dump risky assets in search of safe havens such as government bonds.
Wall Street fell sharply on Tuesday with the S&P 500 and Dow Jones Industrial Average losing over 1 percent in their worst one-day performances since before Trump’s election victory in November.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.3 percent.
The broader NSE Nifty was down 0.85 percent at 9,043.65 by 0520 GMT, its lowest since March 10, while the benchmark BSE Sensex was 0.81 percent lower at 29,248.05.
“The news from the U.S. was the trigger today, but we were expecting corrective and sideways movement as the market was already in an overbought zone. Nifty is consolidating. Midcap stocks have done good run-up and some profit-booking cannot be ruled out,” said Vaishali Parekh, research analyst at Prabhudas Lilladher Pvt Ltd.
“Stocks in the metal and banking sectors had run up to a great extent and these sectors are feeling the pressure now,” added Parekh.
On the Nifty 50, financial stocks contributed most to the losses, led by index heavyweight ICICI Bank (ICBK.NS) which was down 1.6 percent. The Nifty Finance index .NIFTYFIN declined for a fourth consecutive session.
Auto stocks also lost traction with Mahindra & Mahindra Ltd (MAHM.NS) and Tata Motors (TAMO.NS) falling 2 percent and 1.4 percent, respectively, to pull down the NSE index.
Telecom services provider Bharti Airtel (BRTI.NS) was among the top losers on both the NSE and BSE indices, slipping around 3 percent.
Market rumours that the company is planning to hike capex to 300 billion rupees in FY18 to take on the newly-formed Idea-Vodafone combine may be the reason behind the movement, said an analyst covering the stock, who did not wish to be named.
Only four stocks gained on the Nifty index with Axis Bank (AXBK.NS), up 1.58 percent, leading the pack.