Monday, 16 September, 2019

Weak GDP, core sector growth hits stocks, Sensex plunges 2%

Sensex Crashes Over 750 Points In Biggest Fall This Year as Slowdown Concerns Persist Sensex plunges 770 points on weak Q1 GDP numbers, Nifty ends on 10,798
Russell Knight | 04 September, 2019, 10:12

A slew of recent macroeconomic data on GDP, core sector growth and auto sales are pointing towards a deepening economic rout in the country. The broader Nifty too sank 225.35 points, or 2.04 per cent, to settle at 10,797.90. At one point in the day, the Sensex fell over 850 points to 36,466. According to analysts, weakening of the American currency in overseas market led to the appreciation in the local currency.

Top losers in the Sensex pack included ICICI Bank, Tata Steel, Vedanta, HDFC IndusInd Bank, Tata Motors, RIL and ONGC - falling up to 4.45 per cent.

The Indian rupee has extended the morning gains and trading higher by 28 paise at 72.11 per dollar versus Tuesday's close of 72.39.

All sectoral indices ended in the red, with BSE metal, energy, consumer durable, telecom, bankex, finance, oil and gas, realty and capital goods indices settled 3.23 % lower. So far this year, the index has risen 1.37%.

A slew of negative news piled up over the long weekend, latest being the U.S. and China indulging in fresh tariff war, with both sides announcing fresh rounds of import duties, and the deepening domestic slowdown, with paltry growth in eight core sectors, which slipped to 2.1 per cent during July from 7.3 per cent a year ago.

Rupee is likely to move in a range of71.95-72.40 in near future, IFA Global said in a note.

The fall in public sector bank stocks also came after the government announced the merger of ten state-run lenders into four.

Monster Storm Dorian Slows to a Crawl Over the Bahamas
The hurricane center issued a hurricane watch for Florida's East Coast from Deerfield Beach north to Altamaha Sound in Georgia. Initial reports indicate that Hurricane Dorian has caused unprecedented devastation with one confirmed death.

British PM says to call general election after defeat in parliament
Sterling slumped 0.62 per cent against the dollar to US$1.1991, the first time it has dropped below US$1.20 since 2017. A no-confidence vote would spark a 14-day period in which Johnson could try to overturn the result.

Britain's Johnson loses majority ahead of Brexit Parliament showdown
Johnson insists the potential for leaving without a deal must remain as a bargaining chip in negotiations with the EU. Leaked government assessments have warned that no-deal could lead to food, fuel and medicine shortages.

However, the merger will still be painful as a result of the geographic and cultural diversity of the merging entities, they added.

A separate private-sector survey indicated that expansion in the country's manufacturing sector hit its slowest in 15 months in August, as demand and output grew at their weakest pace in a year and cost pressures increased.

A weaker than expected GDP growth rate numbers for the first quarter of the financial year weighed on investor sentiments as domestic equity indices BSE Sensex and NSE Nifty cracked over 2 percent on Tuesday.

Besides, the growth of eight core industries dropped to 2.1 per cent in July, mainly due to contraction in coal, crude oil and natural gas production.

"We are doing very well in our negotiations with China".

Global oil benchmark Brent crude fell 1.07 per cent to 58.03 per barrel (intra-day).

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