The Sensex and Nifty closed lower for the second straight day today, tracking a sell-off across global markets after the US and China reignited their trade dispute. The BSE Sensex plunged around 262 points to end at a two-week low of 35,286.74, while the broader Nifty dropped 89 points to 10,710.45. This is the index's lowest closing since June 6, when it had ended at 35,178.
Asian markets nosedived after US President Donald Trump's threat to impose a 10 percent tariff on another $200 billion of Chinese goods drew warnings from Beijing of about $50 billion retaliatory penalties on US goods.
Unabated selling by foreign funds and a weak rupee added to the gloom, brokers said."Escalating trade disputes between US and China is impacting global market and the ripple effect dented the domestic market sentiment. Lack of fresh triggers and weakening rupee may lead the market to consolidate further. Consolidation in oil price in expectation of gradual increase in output ahead of OPEC meet may provide some support to INR," said Vinod Nair, Head of Research, Geojit Financial Services.
Vedanta was the biggest loser in the Sensex pack, sinking 3.55 per cent, followed by Adani Ports that fell 2 per cent. Other laggards included M&M, RIL, IndusInd Bank, Sun Pharma, Bajaj Auto, Infosys, SBI, Maruti Suzuki, Tata Motors, Wipro, Axis Bank, Tata Steel, L&T, Asian Paints, Coal India, Kotak Bank and Hero MotoCorp, falling up to 1.94 per cent.
Only ITC, HDFC Bank, HDFC Ltd and ONGC managed to close in the green.
All sectoral indices ended in the red. Metal fell 1.69 per cent, followed by realty (1.33 per cent), oil and gas (1.22 per cent), IT (1.21 per cent), teck (1.08 per cent), PSU (1.07 per cent), auto (1.06 per cent), power (1.02 per cent), consumer durables (0.93 per cent), capital goods (0.91 per cent), infrastructure (0.71 per cent) and banking (0.64 per cent).
Selling pressure also gathered momentum in broader markets, with the BSE small-cap index falling 1.29 per cent and the mid-cap index losing 0.98 per cent.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 754.43 crore, while domestic institutional investors (DIIs) picked up equities worth Rs 824.10 crore yesterday, as per provisional data.
Germany's DAX was down a sharp 1.3 percent to 12,673 and France's CAC 40 fell 1.1 percent to 5,394. London's FTSE 100 lost 0.4 percent to 7,598. Wall Street looked poised for heavy losses, with the future for the Dow Jones industrial average off 1.3 percent and that for the Standard & Poor's 500 index down 1.1 percent.
The losses were even heavier in Asia, where the Shanghai Composite Index fell 3.8 percent to 2,907.82 and Hong Kong's Hang Seng lost 2.8 percent to 29,468.15. Tokyo's Nikkei 225 retreated 1.8 percent to 22,278.48 and Seoul's Kospi gave up 1.5 percent to 2,340.11. Sensex shed 0.6 percent to 35,331.28 and Sydney's S&P-ASX 200 declined 0.6 percent to 6,102.10.
Trump directed the US Trade Representative to prepare new tariffs on $200 billion in Chinese imports, stepping up a dispute companies and investors worry could drag down global trade and economic growth. Trump accused Beijing of being unwilling to resolve the dispute over complaints it steals or pressures foreign companies to hand over technology. China's Commerce Ministry criticized the White House action as blackmail and said Beijing was ready to retaliate.