Election anxiety, oil prices, global cues roil markets

MUMBAI: Weak global markets coupled with concerns over oil prices and assembly elections rattled Indian markets on Thursday, sending local shares sharply lower.

The Sensex and Nifty indices dropped around 1.6%, amid concerns over slowing global growth and doubts that the US-China trade war will abate anytime soon. The 30-share Sensex closed at 35,312.13 points, down 572.28 points, or 1.59%, while the Nifty ended at 10,601.15, falling 181.75 points, or 1.69%.

Crude price slipped 2.26% on Thursday even as US President Donald trump urged the Organisation of Petroleum Exporting Countries (Opec) not to curb oil supplies before the start of a key meting. Oil veered between gains and losses as uncertainty lingers over the scale of output cuts. So far this year, crude prices have fallen 10.9% and are currently down 32% from their 2018 peak of $86.29 per barrel on 3 October.

Jayant Manglik, president, Religare Broking Ltd, said the markets were pressured by weak global markets and anxiety ahead of key events.

“Sentiment was downbeat from the beginning, citing weak global markets ahead of the Opec meet. Besides, rising anxiety among the participants ahead of assembly elections results and the deterioration of rupee further dampened the mood. Markets have been behaving extremely volatile for last one month and still there’s no sign of slowing down,” he added.

Among Asian indices, Hong Kong’s Hang Seng index fell 2.47%, China’s Shanghai Composite fell 1.68% and South Korea’s Kospi index fell 1.55%.

Investors also remained jittery ahead of state election results due next week. “Proximity to general elections increases the market relevance of the state elections. Results will be taken as a reflection of the underlying mood, especially on reform-led disruption and regional hot-button issues like rural policies and concern over farm distress,” said Radhika Rao, economist at DBS Bank, in a 26 November note. Global markets fell after the arrest of chief financial officer (CFO) of Chinese technology giant Huawei Technologies Co. reignited concerns about US-China tensions.

Shares of non-banking financial companies (NBFCs) slumped after the Reserve Bank of India (RBI) dashed hopes of any special liquidity window for them—a key government demand to keep adequate liquidity in the system—but signalled more bond purchases via open market operations (OMOs) till end of March.