Global trade war jitters spook Indian markets hit 5-month low on to join global sell-off frenzy

Sensex tanks 410 points to 5-month low, Nifty slips below 10000-mark

Mumbai : The BSE Sensex plunged by about 410 points to close at a five-month low and the Nifty 50 slipped below the key psychological level of 10000 points on Friday as China’s plans for retaliatory tariffs against US goods stoked fears of a global trade war.

Though the fall in the benchmark Indian equity indices were the least when compared to other Asian markets, which fell in a range of 2-4.5 per cent, investors worried that the domestic markets can’t be sheltered from a global trade war and its likely negative impact on global commodity prices.

The 30-share Sensex tumbled by 409.73 points or 1.24 per cent to close at five month low of 32,596.54, a level last seen on October 23 last year. The Nifty ended below the psychological 10,000-level by dropping 116.70 points or 1.15 per cent to 9,998.05, the lowest closing level in five months.

Investor wealth today slumped by Rs 1.57 lakh crore, following heavy selling in the broader market.

“The benchmark indices found support at below 10000 levels as the velocity of the fall had been sharp (down 10 per cent from its historical peak levels in January), but I guess there will still be pain if global markets continue to decline,” said Vaishali Parekh, analyst at brokerage Prabhudas Lilladher.

“The fears of a global trade war played a major role in Friday’s fall across global markets. Locally, markets have been facing headwinds since the start of February, be it the imposition of long term capital gains or the much talked about banking fraud. This being a politically busy year in India, volatility can stay high for an extended period,” said Devang Mehta, Head – Equity Advisory, Centrum Wealth Management.

Investor sentiment turned extremely bearish, in line with sharp losses on the Wall Street, Asian and European markets, on growing fears of a global trade war after Donald Trump imposed tariffs on Chinese imports and Beijing drawing up a list of retaliatory measures, brokers said.

The Nikkei 225 fell 4.5 per cent after dropping to its lowest levels in more than five months. Greater Hong Kong’s Hang Seng closed down 2.45 per cent while the Shanghai composite fell 3.38 percent to close at 3,153.09 points.  European stocks fell, with Germany’s Dax down 1.4 per cent, the French CAC 40 1.3 per cent lower and Britain’s FTSE 100 0.4 per cent in the red.