Sensex tanks 491 points to end below 39k on broad-based sell-off

Sensex tanks 491 points to end below 39k on broad-based sell-off

Mumbai, Jun 17: Benchmark indices slipped on Monday, dented by losses across sectors, after India slapped higher tariffs on certain US products in retaliation to Washington’s decision to remove certain trade privileges for New Delhi.
The government, after dragging its feet for almost a year, decided to increase tariffs on 29 high-value US agricultural and industrial imports by up to 50 per cent.
The investor sentiment was further dampened by concerns over patchy monsoon.
The benchmark S&P BSE Sensex ended the day 491 points, or 1.25 per cent, lower at 38,961, with Tata Steel, Tata Motors, ONGC, Vedanta, and Sun Pharma topping the list of losers. Only YES Bank, Coal India, and Infosys out of the 30 BSE constituents ended the session in the green.
The broader Nifty50 index dipped 151 points, or 1.28 per cent, to 11,672.
All the Nifty sectoral indices closed Monday’s session with losses, with Nifty Metal, down 2.87 per cent, and Nifty Auto, down 1.69 per cent, taking the deepest cuts. Moreover, Nifty Bank, Nifty Fin Service, Nifty Pharma, Nifty PSU Bank, and Nifty Private Bank, all dipped over 1 per cent.
In the broader market, the S&P BSE MidCap index settled at 14,531, down 190 points, or 1.29 per cent, while the S&P BSE Smallcap index skidded 193 points, or 1.35 per cent, to 14,173.
BUZZING STOCKS
Shares of Reliance Infrastructure (RInfra) hit an over 28-year low of Rs 52.70, down 10 per cent on the BSE on Monday in the early morning trade after the auditors raised questions about the company’s ability to continue in business.
Shriram Transport Finance Company shares dipped 8 per cent to Rs 1,000 in morning deal on the National Stock Exchange (NSE) on Monday after Piramal Enterprises sold its entire 9.96 per cent stake in the company through open market.
Shares of New Delhi Television (NDTV) skid 8 per cent to Rs 32.10 during the early morning trade on the BSE on Monday, after markets regulator the Securities and Exchange Board of India (Sebi) banned the group chairman Prannoy Roy and director Radhika Roy from assessing the capital market for two years.
Higher valuations pinch
Concerns over higher valuations have dampened market sentiment in the past few sessions after another subdued quarter of earnings. At present, the benchmark BSE Sensex is hovering at price-to-earnings (P/E) ratio of 28 times, against an average of 21.80 times during the past five trading session.
“Valuation-wise, market is definitely not at comfortable levels,” said Rajnath Yadav.
Geopolitical tensions
Tensions between the US and China are spilling over into other countries as well. India on Sunday imposed higher customs duties on as many as 28 US products, including almonds, pulses and walnuts, in response to higher tariffs imposed by Washington on Indian products such as steel and aluminium.
The move will hurt American exporters of these 28 items, as they will have to pay higher duties, making those items costlier in the Indian market.
Fed rate cut bets get cold
The global stock markets had witnessed a decent rally on hopes of US Federal Reserve cutting rates in June meet. However, according to a Reuters report, the central bank is now expected to leave borrowing costs unchanged on Wednesday, but possibly lay the groundwork for a rate cut later this year.