Market slumps as US-China trade fight escalates over tariffs
Apr 04, 2018 | Source: Capital Market - Live News
The market declined sharply, mirroring weak global stocks, amid escalating trade war between China and the US. The barometer index, the S&P BSE Sensex, tumbled 351.56 points or 1.05% at 33,019.07. The Nifty 50 index lost 116.60 points or 1.14% at 10,128.40. The Sensex settled a tad above the psychological 33,000 mark after falling below that level in intraday trade.
Overseas, US index futures slumped while most shares in Europe and Asia dropped after China today, 4 April 2018 announced additional tariffs on $50 billion of US goods. China will impose additional tariffs of 25% on 106 US goods including soybeans, autos, chemicals, some types of aircraft and corn products, among other agricultural goods.
On the macro front, the service sector in China continued to expand in March, albeit at a slower pace, the latest survey from Caixin revealed with a services PMI score of 52.3, down from 54.2 in February.
Trading in US index futures indicated that the Dow could slide 530 points at the opening bell today, 4 April 2018. Worries about global trade war have persisted, after the Trump administration put global tariffs on imports of steel and aluminum, but then exempted most countries from those levies.
US stocks closed higher yesterday, 3 April 2018 as Tesla, Amazon and other tech companies rebounded after recent sharp losses and as investors looked forward to earnings season.
The Trump administration yesterday, 3 April 2018, announced 25% tariffs on $50 billion of annual imports from China, covering around 1,300 industrial technology, transport and medical products.
Back home, trading for the day began on a quiet note as stocks traded with small gains in early trade. Key benchmark indices picked up steam in morning trade to hit fresh intraday high. Stocks pared gains in mid-morning trade. Indices reversed trend in afternoon trade. Stocks traded weak in mid-afternoon trade. Fresh sell-off pulled the key equity benchmarks to intraday low in late trade.
The Sensex fell 351.56 points or 1.05% to settle at 33,019.07, its lowest closing level since 28 March 2018. The index rose 134.90 points, or 0.40% at the days high of 33,505.53. The index fell 398.07 points, or 1.19% at the days low of 32,972.56.
The Nifty 50 index fell 116.60 points or 1.14% to settle at 10,128.40, its lowest closing level since 28 March 2018. The index rose 34.85 points, or 0.34% at the days high of 10,279.85. The index fell 133.70 points, or 1.31% at the days low of 10,111.30.
The S&P BSE Mid-Cap index fell down 0.92%. The S&P BSE Small-Cap index fell 1.01%. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,444 shares declined and 1,190 shares rose. A total of 150 shares were unchanged. Breadth was strong till early afternoon trade. It turned negative from positive in mid-afternoon trade.
Among the sectoral indices on BSE, the S&P BSE Metal index (down 2.75%), the S&P BSE Consumer Durables index (down 2.55%), the S&P BSE Basic Materials index (down 2.07%), the S&P BSE Capital Goods index (down 1.95%), the S&P BSE Bankex (down 1.63%), the S&P BSE Finance index (down 1.41%), the S&P BSE Power index (down 1.3%), the S&P BSE Realty index (down 1.23%), the S&P BSE Telecom index (down 1.23%), the S&P BSE Oil & Gas index (down 1.15%), the S&P BSE Utilities index (down 1.12%) and the S&P BSE Teck index (down 1.06%), underperformed the Sensex. The S&P BSE IT index (down 0.96%), the S&P BSE Energy index (down 0.92%), the S&P BSE Industrials index (down 0.86%), the S&P BSE Consumer Discretionary Goods & Services index (down 0.65%), the S&P BSE FMCG index (down 0.15%) and the S&P BSE Auto index rose 0.42%%), outperformed the Sensex. The S&P BSE Healthcare index fell 1.05%, matching the Sensexs losses in percentage terms.
Banks declined. Among private sector banks, Axis Bank (down 2.61%), Kotak Mahindra Bank (down 2.25%), Yes Bank (down 2.24%), HDFC Bank (down 1.63%), ICICI Bank (down 0.43%) and Federal Bank (down 0.11%), edged lower. RBL Bank (up 0.95%) and City Union Bank (up 1.01%), edged higher.
IndusInd Bank shed 2.26% to Rs 1,788.50. In relation announcement on 14 March 2017 of IndusInd Bank having entered into an agreement with Infrastructure Leasing and Financial Services (IL&FS), the promoter shareholder of IL&FS Securities Services (ISSL) to acquire 100% of ISSL (proposed acquisition), the Reserve Bank of India has granted approval for the proposed acquisition. The announcement was made during market hours today, 4 April 2018.
Among state-run banks, Bank of India (down 4.04%), Bank of Baroda (down 3.65%), Central Bank of India (down 3.2%), IDBI Bank (down 3.12%), Andhra Bank (down 2.64%), Canara Bank (down 2.55%), Syndicate Bank (down 2.5%), Vijaya Bank (down 1.75%), Union Bank of India (down 1.65%), State Bank of India (down 1.38%), Punjab National Bank (down 1.36%), Indian Bank (down 1.25%), Punjab & Sind Bank (down 1.17%), Allahabad Bank (down 0.8%), Dena Bank (down 0.77%), Bank of Maharashtra (down 0.71%) and Corporation Bank (down 0.32%), edged lower. UCO Bank (up 0.45%) and United Bank of India (up 2.03%), edged higher.
Metal and mining stocks fell as copper prices dropped in global commodity markets. Jindal Steel & Power (down 4.42%), Steel Authority of India (down 3.47%), Vedanta (down 3.47%), Hindalco Industries (down 3.37%), NMDC (down 2.44%), JSW Steel (down 2.33%), Hindustan Copper (down 2.22%) and Hindustan Zinc (down 0.89%), edged lower. National Aluminium Company rose 2.86%.
Tata Steel fell 3.29%. The board of directors at the meeting held yesterday, 3 April 2018 decided to defer the matter on issuance of unsecured debt securities on private placement basis. The announcement was made after market hours yesterday, 3 April 2018.
Copper edged lower in the global commodities market. High Grade Copper for May 2018 delivery was currently off 2.46% at $2.988 per pound on the COMEX.
Auto major Tata Motors rose 3.60% to Rs 355.70 on reports Jaguar Land Rover India reported strong sales in the year ended March 2018. According to media reports, Jaguar Land Rover (JLR) India reported 83.33% jump in total sales to 4,609 units in the year ended March 2018 over the year ended March 2017. JLR India plans to bring 10 new products in India in 2018-2019, reports added.
Traders and investors are awaiting the outcome of the Reserve Bank of Indias (RBI) monetary policy meeting. The RBIs two-day Monetary Policy Committee (MPC) meeting began today, 4 April 2018 for the first bi-monthly monetary policy for 2018-2019. The resolution of the MPC will be announced at 14:30 IST tomorrow, 5 April 2018. As per reports, the central bank is likely to keep interest rates unchanged in the first monetary policy review of the current fiscal year, amid a gradual recovery in growth and easing inflation.
In its last meeting on 7 February 2018, RBI decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6%. Consequently, the reverse repo rate under the LAF remains at 5.75%, and the marginal standing facility (MSF) rate and the bank rate at 6.25%.