Market benchmarks Sensex and Nifty opened on a weak note on Monday weighed down by a sharp fall in other Asian equities amid uncertainty over US-China trade deal and escalating political issues in Hong Kong.
— CNBC-TV18 (@CNBCTV18Live) November 11, 2019
After opening over 100 points lower, the 30-share index was trading 44.75 points, or 0.11 percent, lower at 40,278.86. Similarly, the broader NSE Nifty slipped 11.45 points, or 0.10 percent, to 11,896.70.
Top losers in the Sensex pack included Sun Pharma, HCL Tech, TCS, Infosys, RIL, Vedanta and Asian Paints, shedding up to 1.43 percent, according to a PTI report.
On the other hand, Yes Bank, M&M, Tata Motors, NTPC, Tata Steel and Kotak Bank rose up to 2.61 percent.
The Nifty PSU Bank index, which tracks state-run lenders, was the top gainer among NSE sectoral indexes, rising nearly 0.8 percent. The index was led by a 3.4 percent gain in Bank of Baroda, which reported a rise in September quarter profit on Friday.
Meanwhile, the Nifty realty index rose for a third straight session, gaining 0.7 percent.
Moody’s had on Thursday lowered India’s ratings outlook to “negative” from “stable”, citing increasing risks that growth in Asia’s third-largest economy will remain lower than in the past.
Subsequently, in the previous session, the Sensex had ended 330.13 points, or 0.81 percent lower at 40,323.61. Similarly, the Nifty plunged 103.90 points, or 0.86 percent, to end at 11,908.15.
Foreign institutional investors (FIIs) purchased shares worth Rs 932.20 crore in the capital market on Friday, while domestic institutional investors sold equities worth Rs 584.48 crore, data available with stock exchange showed.
Rupee depreciates 8 paise
The Indian rupee depreciated 8 paise to 71.34 against the US dollar in early trade on Monday tracking uncertainty over the US-China trade deal and subdued opening of the domestic equity market.
However, weakness in the US dollar against other currencies overseas and easing crude oil prices supported the domestic unit and capped the fall.
At the interbank foreign exchange, the rupee opened at 71.36 against the US dollar, showing a decline of 8 paise over its previous closing.
On Friday, the local unit had closed an over three-week low of 71.28 against the US dollar.
Asian shares reverse gains
Asian shares reversed gains on Monday, the yen ticked higher and gold jumped as fresh violence broke out in Hong Kong, while uncertainty still remained over whether the United States and China could end their damaging trade war, according to Reuters.
Hong Kong's Hang Seng index led the losses in Asia, down more than 1 percent, after police fired live rounds at protestors on the eastern side of Hong Kong island. Cable TV and other Hong Kong media reported at least one protester being wounded. Video footage showed a protester lying in a pool of blood.
Chinese shares too started lower with the blue-chip CSI300 index down 0.6 percent. South Korea's KOSPI lost 0.7 percent.
Japan's Nikkei gave up early gains to drift away from a recent 13-month high after data showed the country's core machinery orders fell for a third straight month.
Australian shares bucked the downbeat trend, rising 0.5 percent to a two-week high.
That left MSCI’s broadest index of Asia-Pacific shares outside Japan down 0.5 percent.
“The China-US trade war and the Hong Kong protest are combining to cast a negative pall on Asian markets today,” said James McGlew, analyst at stockbroking firm Argonaut.
“Hong Kong protests have been dragging on for a while and the view from the financial world is that it’s really starting to bite now. The further this drags on it’s certainly going to be very negative.”
Gold, which rises during times of uncertainty, rebounded from a three-month low touched on Friday to be last up 0.4 percent at $1,463.5 an ounce.
In currencies, the Japanese yen gained on the dollar to 109.11 while the Australian dollar, a liquid gauge for risk, was off slightly at $0.6855.
The dollar index was mostly flat at 98.353 as was the euro at $1.102.
Market attention was also on the US-China trade talks.
US President Donald Trump told reporters on Saturday that talks with China had moved more slowly than he would have liked, but added that Beijing wanted a deal more than he did.
That was a more upbeat tone than just a few days earlier when he had stressed that the White House would not agree to a full rollback of existing tariffs, remarks that hit stock prices and the dollar.
“Despite his bluster that ‘China wants a trade deal more than I do’, markets sense that Trump is likely quite keen to call a truce on what is becoming a serious U.S. economic risk heading into the 2020 election year,” said David Bassanese, Sydney-based economist at Betashares.
By the close of Wall Street on Friday, optimism had returned to the market as investors bet that Washington needs a deal and it is in the interest of China, too. All three major U.S. indexes eked out record closing highs.
The Dow inched up while the S&P 500 climbed 0.3 percent and the Nasdaq Composite added 0.5 percent. The record closing high by the S&P 500 was the fourth in six sessions as U.S. stocks rallied on hopes of a trade deal.
In early Asian hours on Monday, E-minis for the S&P 500 were 0.2 percent lower indicating a weak open later in the day.
“Focus this week will again be on any reports on US-China trade negotiations,” Bassanese said. “There is still a lingering risk that talks could fail once again, in which case the recent risk-on global sentiment could be quickly unwound.”
US officials said a lot of work remained to be done when Trump announced the outlines of an interim deal last month, and Beijing has since pushed back on U.S. demands for big agricultural purchases, among other issues.
Analysts said the outlook for equities was highly dependent on US economic data as a US-China trade agreement would help bolster manufacturing and industrial sectors.
Data on October US industrial production and retail sales, along with the National Federation of Independent Business’s monthly small business survey, are scheduled for release this week.
Elsewhere, benchmark Brent crude LCOc1 fell 43 cents to $62.08 a barrel while West Texas Intermediate (WTI) crude CLc1 slipped 35 cents to $56.89 a barrel.
— With inputs from agencies
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Updated Date: Nov 11, 2019 11:13:35 IST