Stock Market Decline: Trade War Worries

Mumbai, Oct 13 (PTI) Benchmark indices Sensex and Nifty fell on Monday due to selling in IT and FMCG shares and a weak trend in global markets after US President Donald Trump announced an additional 100 per cent tariff on Chinese goods from November 1.

The 30-share BSE Sensex dropped 173.77 points or 0.21 per cent to settle at 82,327.05, snapping its two-day rally. After a gap-down opening, it tanked 457.68 points or 0.55 per cent to a low of 82,043.14. However, resilience in banking and financial majors helped limit the downside in the second half.

The 50-share NSE Nifty declined 58 points or 0.23 per cent to 25,227.35 as 30 of its constituents closed lower, 19 with gains and one unchanged.

Among Sensex firms, Tata Motors fell the most by 2.67 per cent a day ahead of the record date for determining shareholders' eligibility for receiving shares in the demerged commercial vehicle business.

Infosys, Hindustan Unilever, Power Grid, Bharat Electronics, ITC, UltraTech Cement and Tata Consultancy Services were also among the laggards.

However, Adani Ports, Bajaj Finance, Bajaj Finserv and Axis Bank were among the gainers.

"Renewed US–China trade tensions sparked broad-based profit-booking in early Monday trade, reflecting heightened investor caution. However, reports of an Indian trade delegation visiting the US this week lifted sentiment, fueling optimism about a potential breakthrough in bilateral trade negotiations and the successful conclusion of a long-awaited trade deal," Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, said.

The BSE smallcap gauge declined 0.43 per cent, and the midcap dipped 0.18 per cent.

IT tanked 0.90 per cent, followed by capital goods (0.85 per cent), FMCG (0.83 per cent), BSE Focused IT (0.82 per cent) and telecommunication (0.66 per cent).

Financial Services, utilities, bankex, services, power and realty were the gainers.

As many as 2,627 stocks declined while 1,664 advanced and 168 remained unchanged on the BSE.



"Tariff escalation concerns—particularly after the U.S. President's statement on the possibility of imposing an additional 100% duty on Chinese goods—triggered risk aversion across global equities, which in turn dampened domestic sentiment," Ajit Mishra – SVP, Research, Religare Broking Ltd said.

In Asian markets, South Korea's Kospi, Shanghai's SSE Composite Index and Hong Kong's Hang Seng settled lower. Equity markets in Tokyo were closed due to a holiday. Stock markets in Europe were trading higher.

US markets ended significantly lower on Friday. The Nasdaq Composite tanked 3.56 per cent, while the S&P 500 tumbled 2.71 per cent and the Dow Jones Industrial Average dropped 1.90 per cent.

"The domestic markets started the week on a cautious note as the ongoing US government shutdown and escalating US-China trade tensions triggered risk-off sentiment across Asia," Vinod Nair, Head of Research, Geojit Investments Limited, said.

Global oil benchmark Brent crude jumped 1.77 per cent to USD 63.84 a barrel.

Foreign Institutional Investors (FIIs) bought equities worth Rs 459.20 crore on Friday, according to exchange data.