Pedestrians walk near the Bombay Stock Exchange (BSE), center, in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

Caution Grips Sensex, Nifty As Trade War Concerns Intensify

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Indian equity benchmarks edged lower as caution gripped Dalal Street after concerns rose over escalating protectionist standoff between the U.S. and China.

The S&P BSE Sensex fell 0.21 percent or 74 points to 35,548 and the NSE Nifty 50 index declined 0.17 percent or 18 points to 10,800.

Tariffs are irrational, market expert Ajay Bagga told BloombergQuint over phone. "If you go back to 1929-30, the U.S. passed a law which was for tariff wars and protectionism and that was at the heart of the great depression," Bagga said.

The market fears that if protectionism comes in, globalisation goes out of the window... it can lead to a lot of constriction for the global economy and artificial barriers coming up... so markets are trying to digest if it is Trump's way of posturing or will anything come on July 5, Bagga said.

In today's trade, fourteen out of 19 sector gauges compiled by BSE ended lower led by the S&P BSE Metal index's 1.7 percent drop. On the other hand, the S&P BSE Oil & Gas index rose over a percent led by oil retailers after crude fell for second straight day ahead of the OPEC meet to discuss relaxing output cuts.

The mid- and small-cap shares underperformed their larger peers as the Nifty Midcap 100 index fell 0.3 percent and the Nifty Smallcap 100 index declined 0.8 percent.

Fab Four Stocks Of The Day

  • Kanoria Chemicals: The Kolkata-based chemical maker rose as much as 7 percent, the most in over a month, to Rs 73.50. The company is planning to set up formaldehyde plant with 1 lakh tonne per annum capacity in Andhra Pradesh, Kanoria Chemicals said in an exchange filing.
  • Idea Cellular: The Aditya Birla Group wireless carrier rose as much as 4.2 percent to Rs 63.20 as the telecom department is likely to approve merger of Vodafone India and Idea Cellular.
  • Panacea Biotech: The Punjab-based drugmaker rose as much as 5.2 percent to Rs 287.20 after settled patent dispute with Celgene Corp.
  • Bata India: The Gurugram-based shoe maker rose as much as 4.4 percent to Rs 813.65 after Angel Broking initiated coverage on the stock with a ‘Buy’ for target price of Rs 896.

Government Plans To Sell Stake In Coal India This Financial Year

Government is planning to offload a stake in Coal India to speed asset sales after a disastrous attempt to find a buyer for the cash-strapped Air India, Bloomberg reported citing people with knowledge of the matter said.

Government owns more than 78 percent stake in Coal India and it had sold 10 percent stake in 2015 for Rs 22,550 crore.

Coal India shares fell over 2 percent to intraday low of Rs 273.

Stocks Moving On Heavy Volumes

  • Tata Investment Corp: The Mumbai-based investment firm fell as much as 3.8 percent to Rs 875. Trading volume was 14.6 times its 20-day average.
  • Indo Count Industries: The Mumbai-based textile manufacturer rose as much as 13.9 percent to Rs 77.45. Trading volume was 5.1 times its 20-day average.
  • Cochin Shipyard: The Cochin-based ship building company fell as much as 0.8 percent to Rs 466. Trading volume was 5 times its 20-day average.
  • GHCL: The Noida-based chemical maker rose as much as 5.5 percent to Rs 288.75. Trading volume was 5 times its 20-day average.

Market Check: Sensex, Nifty Trade On Subdued Note

  • Indian equity benchmarks were trading on a subdued note dragged by weakness in metal shares as concerns grew over the escalating protectionist standoff between China and the U.S.
  • The S&P BSE Sensex fell 0.2 percent or 71 points to 35,548 and the NSE Nifty 50 index declined 0.16 percent or 17 points to 10,801.
  • Nine out of 11 sector gauges compiled by National Stock Exchange were trading lower led by Nifty Metal index's 2 percent drop.
  • The mid- and small-cap shares were underperforming larger peers as the Nifty Midcap 100 and Nifty Smallcap 100 indexes fell 0.5 percent.
  • The overall market breadth was negative as 1,629 shares were declining while 840 were advancing on BSE.