Sensex, Nifty decline on global trends as fresh U.S. tariffs unnerve investors
Mumbai, Apr 9 (PTI): Benchmark stock indices Sensex and Nifty closed lower on Wednesday in line with losses in global markets after fresh US tariffs on China, even as the Reserve Bank cut policy rates for a second consecutive time as it sought to bolster the economy in the face of further pressure from damaging US tariffs.
The 30-share BSE Sensex dropped 379.93 points or 0.51 per cent to settle at 73,847.15. During the day, it slumped 554.02 points or 0.74 per cent to a low of 73,673.06.
The NSE Nifty declined 136.70 points or 0.61 per cent to 22,399.15. Intra-day, it tanked 182.6 points or 0.81 per cent to 22,353.25.
Mirroring weak trends in Asian equities, domestic key equity indices opened lower and remained in the negative territory throughout the session after the US imposed a fresh set of tariffs, including a whopping 104 per cent levy on Chinese imports.
"Global financial markets are witnessing renewed selling pressure following the enactment of reciprocal tariffs. A trade war is escalating global risk, with a rise in US bond yields prompting a sell-off in the world's safe treasury assets. In India, a cut in the repo rate, along with an accommodative policy stance, is taken as a constructive step.
"However, it has done little to uplift overall market sentiment, as the world is embracing recessionary risk," Vinod Nair, Head of Research, Geojit Investments Limited, said.
State Bank of India was the biggest loser among Sensex shares, dropping by 3.43 per cent amid a fall in banking shares. Tech Mahindra, Larsen & Toubro, Tata Steel, Sun Pharma, Infosys, HCL Tech, Axis Bank, Tata Consultancy Services and NTPC were also among laggards.
Nestle, Hindustan Unilever, Titan, Power Grid, UltraTech Cement and ITC were among the gainers.
The BSE smallcap gauge dropped 1.08 per cent and midcap index declined 0.73 per cent.
Among sectoral indices, BSE Focused IT tanked 2.19 per cent, while IT (2.01 per cent), realty (2 per cent), teck (1.57 per cent), metal (1.44 per cent) and industrials (1.42 per cent) also declined.
Auto, consumer durables and FMCG were the gainers.
In Asian markets, Tokyo's Nikkei 225 index and South Korea's Kospi settled lower while Shanghai SSE Composite index and Hong Kong's Hang Seng ended higher. Tokyo's Nikkei 225 index dropped nearly 4 per cent.
Markets in Europe were trading sharply lower. US markets ended significantly lower on Tuesday.
The Reserve Bank of India (RBI) cut interest rates on Wednesday for a second consecutive time and signalled more easing to come as it sought to bolster the economy in the face of further pressure from damaging US tariffs.
The Monetary Policy Committee (MPC), consisting of three central bank members and an equal number of external members, voted unanimously to cut the repurchase or repo rate by 25 basis points to 6 per cent. It had reduced rates by an equal measure in February -- the first cut since May 2020.
RBI changed its policy stance to "accommodative" from "neutral", indicating the possibility of more rate cuts in future, Governor Sanjay Malhotra said, announcing the MPC decisions.
The rate cut came on a day when the full 26 per cent additional tariffs on Indian goods exported to the US came into effect.
RBI also lowered its estimate for economic growth to 6.5 per cent for 2025-26 from 6.7 per cent earlier. The inflation projection was also lowered to 4 per cent from 4.2 per cent, keeping it within the target range of 2-6 per cent.
"Markets slipped after a brief rebound, losing over half a per cent as the choppy trend persisted. Sentiment took a hit following the announcement of fresh US tariffs on China, leading to a gap-down opening and a largely range-bound session thereafter. The outcome of the MPC meeting—where a 25 bps rate cut was announced along with a shift to an accommodative stance—failed to evoke any meaningful market reaction," Ajit Mishra – SVP, Research, Religare Broking Ltd, said.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 4,994.24 crore on Tuesday, according to exchange data.
Global oil benchmark Brent crude dropped 4.23 per cent to USD 60.16 a barrel.
After Monday's drubbing, the BSE benchmark jumped 1,089.18 points or 1.49 per cent to settle at 74,227.08 on Tuesday. The Nifty surged 374.25 points or 1.69 per cent to 22,535.85.
Indian stock markets will remain closed on Thursday for Mahavir Jayanti.
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Rupee hits all-time low for second time in a week
Mumbai (PTI): The rupee depreciated 31 paise to settle at 91.99 against the US dollar on Wednesday, touching the lowest closing level for the second time in less than a week, amid increased month-end demand for the greenback.
Forex traders said the rupee opened higher as the US dollar index softened and a long-awaited trade breakthrough with Europe offered quiet reassurance. However, increased month-end demand for the American currency as well as the ongoing geopolitical tensions dented investors' sentiments.
At the interbank foreign exchange, the rupee opened at 91.60 and touched an early high of 91.50, but pared all the gains to touch an intra-day low of 91.99 against the greenback.
The domestic unit settled 31 paise down, revisiting its lowest-ever closing level of 91.99 against the greenback. The Indian currency previously ended at this level on January 23 when it also hit its all-time intraday low of 92 against the US dollar.
On Tuesday, the rupee rebounded from its all-time low levels and gained 22 paise to close at 91.68 against the US dollar.
Analysts said the rupee opened higher as the US dollar index softened and a long-awaited trade breakthrough with Europe bolstered investor sentiment.
India and the European Union on Tuesday announced the conclusion of negotiations for the free trade agreement (FTA), under which a number of domestic sectors such as apparel, chemicals and footwear will get duty-free entry into the 27-nation bloc, while the EU will get access to the Indian market at concessional duty for cars and wines, an official said.
The deal has been dubbed the "mother of all deals" as it will create a market of about 2 billion people.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.07 per cent lower at 96.14.
Brent crude, the global oil benchmark, was trading 0.43 per cent lower at USD 67.28 per barrel in futures trade.
On the domestic equity market front, Sensex jumped 487.20 points to settle at 82,344.68, while Nifty surged 167.35 points to 25,342.75.
Foreign Institutional Investors turned net buyers and purchased equities worth Rs 480.26 crore on Wednesday, according to exchange data.
