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Indian equity markets closed on a negative note on Monday, the first trading day of second half of CY 2018, with the benchmark indices Sensex and Nifty finishing in red after Friday’s steep recovery. Notably, the S&P BSE Sensex index lost nearly 472 points from the day’s high in the intraday dealings on Monday with equity shares of blue-chip companies Reliance Industries (RIL) and HDFC Bank contributing heavily to the index losses. Shares of India’s second-largest IT company Infosys and Asian Paints were the only notable gainers which rose more than 2% each among the components of BSE Sensex on Monday.

4 reasons why Sensex fell 472 points from intraday high today

Trade war jitters

Trade war worries haven’t disappeared yet as the United States is due to impose tariffs on $34 billion worth of Chinese goods. “The key risk for the market isn’t that Trump actually implements his trade threats but rather that a protracted period of trade uncertainty begins to weigh on economic activity,” Reuters said in a report citing unidentified analysts at JPMorgan.

European markets plunge

A cocktail of soft Chinese data, trade jitters and political tensions in Europe tipped emerging market assets back into selloff mode on Monday with stocks falling more than 1% and currencies chalking up losses, Reuters noted in a report. With the latest data available, the pan-European STOXX 600 index shed as much as 0.8% including losses across continent and sectors.

Global markets fell Monday as weaker-than-expected Asian economic surveys ratcheted up worries over the potential impact of higher tariffs due to be imposed by China and the US in a festering trade dispute. Over in Europe, a prolonged German government crisis weighed on sentiment, an Associated Press report said.

Sell-off in Asian markets

A subdued stock market activity was observed in regional Asian markets with China’s share market emerging as the worst hit following unexpected Chinese manufacturing data. Japan’s Nikkei 225 dipped 2.2% to 21,811.93, South Korea’s Kospi declined 2.4% to 2,271.54, China’s Shanghai Composite crashed 2.5% to 2,775.56. Hong Kong stock markets were closed on account of a holiday.

FPIs sell-off reaches 10-year peak

FPIs remain in a sell-off mood as the outflows from India’s capital markets in the first six months of 2018 have hit a 10-year high. With the latest data available with the stock exchanges FPIs (Foreign Portfolio Investors) have withdrawn about Rs 47,800 crore in H1 CY 2018 out of which nearly Rs 41,400 crore is from debt securities and nearly Rs 6,400 is from equity markets. Notably, this is the biggest sell-off in absolute terms since H1 of 2008. According to a PTI report, this is only the second time, when FPIs had taken a bearish stance on the capital markets in the first six months of the year.

Market today

BSE Sensex closed down 159.07 points or 0.45% at 35,264.41 whereas NSE Nifty settled 57 points or 0.53% lower at 10,657.3 on Monday. All the sectoral indices of NSE barring Nifty IT and Nifty PSU Bank ended in negative territory with Nifty Realty, Nifty Metal and Nifty Media leading the losses. India Vix advanced 3.96% to a day’s high of Rs 13.4500 today. During the day, BSE Sensex fell 471.67 points from the day’s high of 35,578.24 to a low of 35,106.57.

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