Sensex falls 351 points to 33,019, Nifty below 10,150 as US-China trade war resumes in new fiscal

The threat of a tariff war between the US and China returned to haunt the market on Wednesday with Sensex and Nifty losing more than 1 percent in afternoon trade following weak global markets. While the Sensex closed 351 points or 1.05% lower to 33,019 level, Nifty fell 116 points to 10,128. This is the benchmark's biggest fall since March 23, when it had lost 409.73 points.

China issued a $50 billion list of US goods including soybeans and aircraft for a possible tariff hike in a spiraling technology dispute with US President Donald Trump.

Earlier, the Trump administration proposed 25 percent tariffs on $50 billion worth of imports from China to protest Beijing's alleged theft of US technology. Consequently, Dow Futures fell 423 points, signalling a lower opening for the US markets today.

Back home, the Sensex fell below the 33,000 mark down nearly 400 points to hit an intra day low of 32,972 level. The Nifty too fell below the key 10,150 mark. On the Sensex, Tata Steel, YES Bank and Axis Bank were the top losers. Of 30 Sensex stocks, 25 closed in the red.

ICICI Securities which made a weak market debut today, closed over 14% lower than its issue price of Rs 520. However, the stock closed 3.24% higher over its open price at 445 level.

Karthikraj Lakshmanan, Senior Fund Manager-Equities at BNP Paribas Mutual Fund said, " It has been a tumultuous day on the bourses today as investors grew weary of renewed trade war fears between the US and China, and adopted a note of caution. Despite opening on a flat note, benchmark indices succumbed to global pressure to finally close the day with losses of over 1%. Additionally, traders and investors awaited the outcome of the RBI's (Reserve Bank of India's) first monetary policy meeting of the financial year, which is to be announced tomorrow. Barring the auto index, which remained firm due to strong sales numbers from an auto giant, all other sectoral indices on the National Stock Exchange (NSE) traded in the red."

Midcaps and small cap indexes fell 150 points and 178 points respectively on BSE. Consumer durables and banking stocks on the BSE led the losses with the sectoral indexes falling 567 points and 447 points respectively.

All 19 sectoral indexes closed in the red except the auto index which rose 0.42% at the end of trade. Market breadth was negative with 1,190 stocks closing higher against 1,444 stocks ending in the red. 150 stocks were unchanged.

The escalating Sino-US trade tensions also dragged down global equity markets, with MSCI's broadest index of Asia-Pacific shares outside Japan down 1.31 percent as of 1008 GMT. US stocks futures and European stocks also extended their fall.

Japan's benchmark Nikkei 225 crept 0.1 percent higher to end at 21,319.55 but South Korea's Kospi slid 1.4 percent to 2,408.06 as the won weakened from the 3 year high it touched against the dollar earlier this week, motivating foreign investors to take profits. The Shanghai Composite slipped 0.2 percent to 3,131.11 and Australia's S&P/ASX 200 edged 0.2 percent higher to 5,761.40. Hong Kong's Hang Seng slumped 2.2 percent to 29,518.69 with the decline accelerating in the final minutes of trading after Beijing announced specifics of its tariff hikes. Shares also fell in Singapore, Thailand, Philippines, Indonesia and India.

European markets sank in early trading. Germany's DAX fell 1.1 percent to 11,867.14 and France's CAC 40 shed 0.4 percent to 5,130.70. Britain's FTSE 100 lost 0.4 percent to 7,001.65.

Wall Street was poised for a big sell-off, with Dow futures tumbling 1.8 percent to 23,557.00. Major US benchmarks ended higher after a late rally. The Dow Jones industrial average rose 1.6 percent to 24,033.36. The Nasdaq composite climbed 1 percent to 6,941.28.