The Nifty50 saw its weakest close in the last five months for the week ended March 24. The index is down nearly 2 percent for the week and about 4.4 percent or 460 points so far in the month of March.
The index crawled back to 10,000 level which was last seen in October 2017. It broke below 10,000 for the first time since September 2017 thanks to trade war fears.
The index closed with losses of nearly 2 percent for the week ended March 23 but there were plenty of stocks which suffered double-digit fall of up to 30 percent.
As many as 50 stocks from the S&P BSE 500 index fell 10-30 percent in just five trading sessions which include names like JBF Industries which dropped 34 percent, followed by HCC which fell by 22 percent, MMTC was down by 19 percent, and Jaiprakash Associates slipped 18 percent in the same period.
Other stocks which witnessed selling pressure include names like South Indian Bank, Bajaj Electricals, Dena Bank, DLF, Unitech, Vedanta, PTC India, Torrent Power, Bajaj Hindustan, etc. among others.
Only 56 stocks out of 500 stocks closed in the green for the week ended March 23 which include names like Techno Electric & Engineering Company, Jubilant Foodworks, Marico, Radico Khaitan, Shilpa Medicare, JK Lakshmi Cement, Ashoka Buildcon, Cyient, etc. among others.
Markets across the globe including India suffered a knee-jerk reaction after US President Donald Trump signed a memorandum that could impose tariffs on up to USD 60 billion of imports from China.
Reacting to the news, China unveiled plans to impose tariffs on up to USD 3 billion of US imports in retaliation against US tariffs on Chinese steel and aluminium products which fuelled fears of other countries coming out with their own set of protectionism measures.
Richard Harris, Chief Executive, Port Shelter Investment Management in an interview with CNBC-TV18 is of the view that equity market is pricing in the bad news w.r.t possible trade war and equity markets are doing what they should be doing.
The reaction on equity markets was nothing short of a bloodbath. Asian markets plunged while back home Sensex and Nifty recorded a cut of over 1 percent. The rout witnessed by the Indian market on Friday has eroded Rs 1.57 crore of investor wealth.
The market capitalisation of BSE fell from Rs 140.87 lakh crore to Rs 139.3 lakh crore, thanks to the Sensex’s 500-point intraday fall. The Nifty managed to breach 10,000-mark and traded below it for a larger part of the day.
During the week, MSCI world equity index ended 3 percent lower while MSC fell less than 2 percent. The decline in EMs was supplemented by foreign institutional investors (FIIs) selling.
“Outflows amounting to over USD 200 million were seen from South Korea and Indonesia. Outflows continued from Brazil and Thailand that averaged USD 150 million. As visible, selling was not very pronounced from EMs,” Amit Gupta, Head of Derivative from ICICIdirect told Moneycontrol.
“In the F&O setup, positions were not that encouraging as FIIs created shorts worth over US$740 million that were also supported by index option buying of over USD 130 million,” he said.
Gupta further added that markets are focused on trade war escalation that is adversely impacting financial conditions and the global growth story. Hence, FIIs could adopt a wait-and-watch mode until more clarity on trade war abatement emerges.moneycontrol