The market extended losses to a fifth session on Monday, dragged by financials and automobiles. The barometer index, the S&P BSE Sensex, fell 494.91 points or 1.34% to 36,346.69, as per the provisional closing data. The Nifty 50 index fell 168.20 points or 1.51% to 10,974.90, as per the provisional closing data. Investors were also cautious ahead of a US Federal Reserve meet on Tuesday.
Global shares declined following renewed uncertainty over US-China trade relations. Monday marks the day when the latest round of tariffs which target products from both the US and China come into effect.
Broader market tumbled. Among secondary barometers, the BSE Mid-Cap index fell 2.39%. The BSE Small-Cap index fell 2.81%.
The market breadth, indicating the overall health of the market, was weak. On BSE, 553 shares rose and 2112 shares fell. A total of 153 shares were unchanged.
Mahindra & Mahindra (down 6.48%), HDFC (down 6.22%), IndusInd Bank (down 4.99%), Adani Ports & Special Economic Zone (down 4.6%), Bharti Airtel (down 4.23%), Tata Motors (down 4.22%) and Maruti Suzuki India (down 3.08%), were the major Sensex losers.
TCS (up 4.82%), Coal India (up 1.94%), Infosys (up 1.71%) and NTPC (up 0.54%), were the major Sensex gainers.
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Tata Steel fell 3.08%. The company announced that it has executed definitive agreements for acquisition of the steel business of Usha Martin (UML) through a slump sale on a going concern basis. The closing of the acquisition is subject to fulfilment of various conditions under the agreements. At the closing, Tata Steel or any of its subsidiaries or affiliates may carry out this acquisition. The parties shall jointly work towards fulfilment of conditions precedent which are largely regulatory approvals required for the transfer of the business undertaking. All the employees pertaining to the steel business will transfer as part of the acquisition.
The steel business undertaking of UML inter-alia comprises of a specialized ~1.0 mtpa alloy based manufacturing capacity in long products segment based in Jamshedpur, a producing iron-ore mine, a coal mine under development and captive power plants. The acquisition is part of the overall strategy to build capability in long products and expand product offerings including high-value added products. The announcement was made on Saturday, 22 September 2018.
Reliance Industries rose 1.16%. The company said its telecom unit, Reliance Jio Infocomm, announced a 5-year partnership with India's leading broadcaster, Star India to unleash a new era in sports entertainment. Jio and Star will make all televised India-cricket matches available to users of JioTV and Hotstar in India. Reliance Industries signed an agreement in this regard with Star India. This partnership will cover T20, One Day Internationals (ODI), International Test Cricket, Premier Domestic Competitions of the BCCI. The announcement was made made after market hours on Friday, 21 September 2018.
On the macro front, Finance Minister Arun Jaitley on Monday assured that there will not be any liquidity crunch for non-banking financial companies (NBFCs), mutual funds and small and medium enterprises (SMEs).
On Sunday, Securities and Exchange Board of India (Sebi) and Reserve Bank of India (RBI) had issued similar statements saying that the RBI and the Sebi are closely monitoring the recent developments in financial markets and are ready to take appropriate actions, if necessary. These statements had some impact on the stock market in the initial trade when both the indices opened higher, but soon turned negative.
Overseas, European stocks declined on Monday, as investors braced for the ramifications of another round of tariffs from the two major economies. Most Asian stocks were trading lower. The markets in Japan, South Korea and China are closed for public holidays on Monday.
The US-China trade war remained in focus Monday, with tariffs from both parties due to go into effect. Washington has announced 10% duties on $200 billion of Chinese imports, which prompted Beijing to respond with tariffs on $60 billion of US goods. On Friday, the media reported that China had called off planned trade talks with the US in the wake of a new round of duties.
In US, the Dow Jones Industrial Average on Friday notched a second straight all-time high, but a slump in technology and internet-related stocks weighed on the broader market, pressuring the Nasdaq.
In the latest US data, a reading on the manufacturing sector rose to 55.6 in September from the previous reading of 54.7. A report on the services sector dipped to 52.9 from 54.8. Both are from IHS Markit.
The US Federal Reserve (Fed) will announce its interest rate decision on Wednesday, 26 September 2018. The Fed kept the target range for the federal funds rate at 1.75% to 2% during its August 2018 meeting.
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