Sensex, Nifty choppy as global investors turn cautious over Donald Trump's impeachment; bank stocks, Tata Steel trade negative

  • Retreating from its record high, the 30-share BSE index was trading 24.89 points or 0.06 percent lower at 41,533.68 in opening session

  • The biggest laggard on the NSE index was Yes Bank Ltd, which slipped over 2 percent

  • The Nifty PSU Bank index, which tracks the country’s state-run lenders, slipped 0.6 percent, with 10 of the 12 stocks on the index trading in the red

Sensex and Nifty started on a choppy note on Thursday as global investors turned cautious over US President Donald Trump's impeachment.

Retreating from its record high, the 30-share BSE index was trading 24.89 points or 0.06 percent lower at 41,533.68 in opening session.

The biggest laggard on the NSE index was Yes Bank Ltd, which slipped over 2 percent.

The Nifty PSU Bank index, which tracks the country’s state-run lenders, slipped 0.6 percent, with 10 of the 12 stocks on the index trading in the red.

The Nifty IT index rose as much as 0.67 percent, with HCL Technologies gaining over 1.5 percent

The NSE Nifty 50 Index fell 0.08 percent to 12,211.50, while the S&P BSE Sensex index was down 0.09 percent at 41,515.96.

Yes Bank was the top loser in the Sensex pack falling up to 2.46 percent, followed by IndusInd Bank, ICICI Bank, Sun Pharma, HDFC, Tata Steel and Bharti Airtel.

Shares in Tata Group companies eked out gains a day after Cyrus Mistry, who had been embroiled in a legal battle with the Group since being ousted in 2016, won backing from a tribunal to be reinstated as executive chairman of its holding company, according to Reuters.

Shares of both Tata Consultancy Services and Tata Motors rose over 1 percent.

On the other hand, M&M was the top gainer, rising up to 1.26 percent. HCL Tech, Tata Motors, Asian Paints, TCS and HUL were also trading in the green.

In the previous session, the 30-share gauge settled 206.40 points, or 0.50 percent, up at its all-time closing high of 41,558.57, and the Nifty advanced 56.65 points, or 0.47 percent, to its record closing peak of 12,221.65, PTI said.

 Sensex, Nifty choppy as global investors turn cautious over Donald Trumps impeachment; bank stocks, Tata Steel trade negative

Representational image. Reuters

According to traders, global investors turned cautious after US Donald Trump became the third President in US history to be impeached.

The House of Representatives formally charged him with abuse of power and obstructing the Congress, setting up a Senate trial next year that will decide whether he remains in office after three tumultuous years.

Meanwhile, on a net basis, foreign institutional investors bought equities worth Rs 1,836.81 crore, while domestic institutional investors sold shares worth Rs 1,267.57 crore on Wednesday, data available with stock exchange showed.

Rupee opens on weak note

The rupee opened on a weak note and fell 5 paise to 71.02 against the US dollar in early trade on Thursday tracking cautious opening in domestic equities.

Forex traders said rupee is trading in a narrow range amid lack of cues on the domestic front.

Sustained foreign fund inflows and weakening of the US dollar vis-a-vis other currencies overseas supported the rupee, while muted opening in domestic equities weighed on the local unit.

At the Interbank Foreign Exchange, the rupee opened weak at 71.01 then fell to 71.02 against the US dollar, showing a decline of 5 paise over its previous closing.

The Indian rupee on Wednesday had closed at 70.97 against the US dollar.

Asian shares ease from highs

Asian shares pulled back from a one-and-a-half year peak on Thursday as investors booked profits ahead of holiday trade and awaited further data on the state of the global economy.

Investors were also watching proceedings in Washington where the Democrat-led US House of Representatives voted to impeach Republican US President Donald Trump for abuse of power and obstruction of Congress.

Market reaction, however, has so far been limited as the Republican-controlled Senate is widely expected not to vote to remove Trump from office.

MSCI’s broadest index of Asia-Pacific shares outside Japan briefly touched the highest since June 2018 but then fell 0.2 percent.

Australian shares erased early gains to trade 0.14% lower due to declines in the mining sector, while Chinese shares .CSI300 drifted 0.06% lower.

The pound nursed heavy losses due to concerns Britain could still crash out of the European Union without a trade deal in place after a transition period ending in December 2020.

Traders also await a Bank of England (BoE) policy meeting later Thursday. No change in policy is expected, but the meeting could pose further downside risks for sterling if more policymakers swing to the dovish camp and vote for an interest rate cut.

Overall sentiment was supportive of equities and riskier assets, but less favorable for safe-haven assets like bonds due to expectations that economic growth will start to pick up next year after a tumultuous 2019.

“Data has been generally supportive of an improvement in economic performance,” said Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors in Sydney.

“Investors can look forward to stronger growth next year, but a lot of this has already been reflected in share markets.”

US stock futures ESc1 edged 0.02 percent lower in Asia on Thursday. The S&P 500 fell 0.04 percent on Wednesday, weighed by a steep drop in FedEx Corp shares after the US parcel delivery company cut its fiscal 2020 profit forecast.

Earlier in the session, the S&P 500 hit its fifth consecutive record high, and analysts said market sentiment remained largely upbeat following last week’s announcement of an initial U.S.-China trade agreement.

Other analysts pointed to recent data releases showing economic improvements in China, the United States and Germany as reasons to be more optimistic.

In the currency market, sterling traded at $1.3089, having tumbled more than 3% from an 18-month high struck on 13 December after UK Prime Minister Boris Johnson's Conservative Party scored a landslide victory in a general election.

Against the euro, the pound stood at 85.03 pence, close to its weakest since 4 December.

Johnson’s government on Tuesday ruled out an extension to the December 2020 deadline for negotiations on a trade deal with the EU, creating a new Brexit cliff-edge and cutting short sterling’s post-election rally.

The focus shifts to the BoE’s policy meeting later Thursday. At its previous meeting, two of the central bank’s nine policymakers voted to cut interest rates.

British inflation remained mired at a three-year low in November, data showed on Wednesday, and uncertainty surrounding Brexit remains high, but this is unlikely to shift expectations that monetary policy will remain on hold.

The Australian dollar jumped by 0.25 percent to $0.6872 after better-than-expected data on the labor market dented expectations for interest rate cuts.

The yen held steady at 109.58 per dollar ahead of a Bank of Japan (BOJ) meeting later on Thursday.

Bourses in Hong Kong, Shanghai, Tokyo and Seoul were trading on a negative note. Benchmarks on Wall Street ended flat on Wednesday.

The BOJ is widely expected to keep its quantitative easing in place by may offer a gloomier assessment of factory output.

US crude CLc1 dipped 0.03 percent to $60.91 a barrel in Asia after US government data showed a decline in crude inventories.

However, prices are likely to be supported due to production cuts coming from the Organization of the Petroleum Exporting Countries and its allies, including Russia.

--With inputs from agencies

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Updated Date: Dec 19, 2019 10:37:34 IST