Markets slip 6% as Us-china tensions escalate

Mumbai: investors lost ₹5.83 lakh crore on Monday as Indian stock markets succumbed to selling pressures tracking global weakness and as concerns around macros weighed on sentiment.

The benchmark indices posted their biggest single-day decline since March 23 while weak corporate earnings for the March quarter also led to the sharp fall.

The BSE Sensex ended at 31,715.35, down 2,002.27 points or 5.94%, while the 50-share index Nifty was at 9,293.50, down 566.40 points or 5.74%.

Other Asian markets in Hong Kong and South Korea declined 2-4% as tensions between the US and China escalated. Markets in China, Japan and Thailand were closed for holidays.

US President Donald Trump on Sunday said he believed that the coronavirus outbreak was the result of a “horrible mistake” by China. US secretary of state Mike Pompeo said there was “a significant amount of evidence” that the virus emerged from a Chinese laboratory, but did not dispute US intelligence agencies’ conclusion that it was not man-made. The Trump administration is “turbocharging” an initiative to remove global industrial supply chains from China as it weighs new tariffs to punish Beijing for its handling of the pandemic, according to a Reuters report.

Analysts said the extension of the countrywide lockdown and fears that the Indian economy and businesses will take longer to get back on track impacted the markets. They said Indian markets will continue to be driven by global news and domestic earnings commentary.

Pankaj Bobade, head - Fundamental Research, Axis Securities said, “Indian markets are positively correlated to US market movements. Last week, markets had run up on expectations of lockdown exit and relief package, both of which didn’t happen.”