Source: The Hindu Businessline

Metal, capital goods stocks lose shine


Benchmark indices were trading down by nearly one per cent in the pre-noon session following a sharp correction in US stocks overnight on escalating geopolitical tensions. A ripple effect was seen across Asian markets which declined up to 1.2 per cent. Besides, caution ahead of IIP data for June due later in the day too weighed on the domestic sentiment.

At 11.45 a.m., the 30-share BSE index Sensex was down 199.97 points or 0.63 per cent at 31,331.36 and the 50-share NSE index Nifty was down 71.2 points or 0.73 per cent at 9,749.05. Among BSE sectoral indices, metal index plunged 1.48 per cent, followed by capital goods 1.1 per cent, infrastructure 0.71 per cent and auto 0.69 per cent. On the other hand, realty index was up 0.86 per cent, healthcare 0.86 per cent, consumer durables 0.78 per cent and oil & gas 0.76 per cent.

Top five Sensex losers were Asian Paints (-2.11%), L&T (-1.75%), Hero MotoCorp (-1.62%), ONGC (-1.5%) and Kotak Bank (-1.23%), while the major gainers were Dr Reddy's (+3.08%), Lupin (+1.62%), State Bank of India (+1.33%), Wipro (+0.75%) and Axis Bank (+0.61%).

Early trade

The BSE 30-share barometer tanked 336.46 points or 1.06 per cent to 31,194.87. It had tumbled 794.08 points in the previous four sessions hit by sliding global sharers due to stand-off between the US and North Korea, and market regulator Sebi’s directive imposing trading restrictions on suspected 331 shell companies. Also, the NSE Nifty fell 115.90 points or 1.18 per cent to 9,704.35.

Capital outflows

Brokers said that apart from continuous selling by investors and sustained foreign fund outflows, deep losses in other bourses and the US markets as investors reacted with dismay to escalating North Korea tensions led to a further slide in the Sensex. In addition, weakness in the rupee against the American currency too weighed on the sentiment. The rupee fell 19 paise to 64.27 against the dollar in early trade at the forex market.

Asian shares

Asian equity markets extended a global slide on Friday as tensions ramped up between the United States and North Korea, sending investors fleeing to less risky assets such the yen, the Swiss franc and US Treasuries. Overnight, Wall Street closed sharply lower after US President Donald Trump issued a new round of fiery rhetoric, warning Pyongyang against attacking Guam or US allies after it disclosed plans to fire missiles over Japan to land near the US Pacific territory.

MSCI's broadest index of Asia-Pacific shares outside Japan skidded 1.2 per cent in its third session of declines, heading for a 2.1 per cent drop for the week. Australian shares were down 1.2 per cent, set for a weekly loss of 0.5 per cent. Japanese markets were closed for a holiday.

(Source: The Hindu Businessline)