The BSE Sensex plunged over 500 points and NSE Nifty fell to 10,600 on Thursday, mirroring sharp losses across global markets, triggered by arrest of a top executive of Chinese tech giant Huawei in Canada.
The BSE SENSEX closed 572.28 points, or 1.59 per cent, lower at 35312.13 and the NSE Nifty ended at 10592.6, down by 190.3 points or by 1.76 per cent.
In the Sensex, 29 out of 30 stocks and in the Nifty, 46 out of 50 stocks ended in the negative terrain.
Here are the five factors that hit market sentiment real hard:
Arrest of Huawei global chief financial officer
Canadian authorities have arrested the chief financial officer of China's Huawei Technologies, who is facing extradition to the United States. The development may escalate tensions between United States and China, who have just agreed to a ceasefire in their trade spat for three months. Huawei chief financial officer Meng Wanzhou, the daughter of founder Ren Zhengfei was detained at Vancouver airport, at the request of the United States, in a matter related to alleged Iran sanctions violations by the company.
Caution ahead of OPEC meeting
Investors remained cautious ahead of the Organisation of the Petroleum Exporting Countries (Opec) meeting in Austria today. The oil producing nations are expected to raise concerns over falling crude prices which has lost around 30 per cent of its value amid surging supply and economic slowdown.
RBI dictate to link floating-rate loans to external benchmarks
Financial and realty stocks were under pressure after Reserve Bank of India (RBI), in the fifth bi-monthly monetary policy statement, said that banks will now have to link the interest rates charged by them on different categories of loans to the external benchmarks, replacing MCLR to bring transparency of interest rate fixing mechanism. RBI has also maintained status quo in its latest policy announcement, a move to maintain liquidity in the system in the backdrop of easing crude prices and a rebound in the rupee from record lows.
Selling across auto stocks
Shares of automobile companies continued its losing streak on Thursday with BSE Auto index and Nifty Auto index skidding over 4 per cent in the last three trading session as investors weighed muted November sales and RBI policy announcement. Shares of Maruti Suzuki India tumbled 4.70 per cent after the auto major said it will hike its car prices across various models in January 2019. The stock opened lower at Rs 7,467.00 against the previous day closing price of Rs 7,559.55.
Foreign and domestic investors press 'sell' button
The market sentiment was also dented by sustained selling by foreign portfolio investors (FPIs) as well as domestic institutional investors (DIIs). According to provision data available with exchange, the FIIs stood as net seller in equity, but net buyer across debt market. Gross equity purchased stood at Rs 5,065.84 crore and gross debt purchased stood at Rs 1,589.77 crore, while the gross equity sold stood at Rs 5,426.67 crore and gross debt sold stood at Rs 452.32 crore. Therefore, the net investment of equity and debt reported were (Rs 360.83) crore and Rs 1,137.45 crore.
Edited by Chitranjan Kumar