China growth woes roil Indian markets

Major Asian indices shed 1-3%; Sensex loses 520 points intraday; rupee slumps 1% against dollar A weak trend in the global equity markets on the back of disappointing economic data from China led to the Indian benchmarks shedding 1% on Wednesday as investors became jittery over the near-term outlook on equities. The 30-share Sensex fell below the psychological 36,000-mark while losing 363.05 points, or 1%, to close at 35,891.52. During intraday trades, the benchmark was down nearly 520 points to touch a low of 35,734.01. The negative sentiment was further corroborated by the weak market breadth as more than 1,600 stocks lost ground on the BSE, as against only 923 gainers. All the broader indices, including BSE SmallCap and BSE Midcap, ended the day in the red on Wednesday. Meanwhile, the 50-share Nifty closed at 10,792.50, down 117.60 points or 1.08%. Elsewhere in Asia, Hang Seng lost a whopping 715 points or nearly 3% with South Korea’s Kospi and Taiwan’s TSEC indices also shedding over 1% each. Most European markets were also trading in the red at the time of writing. Market participants attributed the weakness to the contraction in the manufacturing activity — the first in 19 months — in China. Incidentally, data showed that factory activity has shrunk in other Asian economies such as Malaysia, Taiwan and South Korea, too. Earnings season The upcoming results season, beginning next week, also acted as a catalyst for the fall in the Indian market as investors have turned cautious amid a global bearish trend, they added. Auto and metal stocks bore the brunt on Wednesday with Vedanta, Tata Steel, M&M, Tata Motors, Maruti Suzuki and Hero Motocorp among the top losers in the Sensex pack. Both Vedanta and Tata Steel lost more than 4% each on Wednesday amid concerns of a global slowdown. Both the BSE Metal and BSE Auto indices were the worst hit among sectoral indices, shedding over 3% each. Weak GST collections The weakness in equities spilled into the currency markets with the rupee falling over 1% against the dollar to close the day at 70.18. The rupee opened lower at 69.60 and fell further to touch the day’s low of 70.23-a- dollar. Strengthening of the dollar against all major global currencies apart from unfavourble domestic factors like weak GST collection also contributed to the rupee’s fall. Brent crude, the global benchmark, was trading higher at $56.20 per barrel after falling to $52.51.

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