Mumbai, India (BBN) – The Sensex plunged nearly 240 points and the Nifty fell 1.1 per cent as information technology stocks were hit by tough talk on visas by US president-elect Donald Trump, while oil retailers declined after crude prices surged to their highest since mid-2015.
Sentiment was also weakened by continued uncertainty about the impact on the economy and corporate profits from the cash shortage sparked by the country’s demonetisation drive, reports The Hindu Business Line.
Sentiment was also dampened after industrial output unexpectedly fell in October by 1.9 per cent, driven down by a contraction in manufacturing and mining sectors, according to data released late on Friday.
The broader NSE index fell 90.95 points or 1.1 per cent to 8,170.80, while the benchmark BSE index closed 231.94 points or 0.87 per cent lower at 26,515.24.
Among BSE sectoral indices, auto index fell the most by 1.73 per cent, banking 1.67 per cent, FMCG 1.2 per cent and oil & gas 1.14 per cent.
Major Sensex losers were Asian Paints (-3.33%), Axis Bank (-2.56%), Bajaj Auto (-2.52%), Tata Motors (-2.05%) and Hero MotoCorp (-1.97%), while the top five gainers were ONGC (+1.43%), NTPC (+0.82%), TCS (+0.58%), Sun Pharma (+0.49%) and L&T (+0.26%).
IT firms were among the leading decliners, with the Nifty IT index shedding as much as 1.51 per cent, after Trump had on Friday pledged to stop companies from abusing the visa process for foreign workers.
Infosys Ltd fell as much as 2.44 per cent, while Tata Consultancy Services Ltd and Wipro Ltd shed up to 1.47 per cent and 1.44 per cent, respectively.
Oil retailers were down on concerns about the impact of higher crude prices.
Bharat Petroleum Corp Ltd fell as much as 2.51 per cent, while Indian Oil Corp declined up to 2.23 per cent.
But oil and gas explorer Oil & Natural Gas Corp rose as much as 2.54 per cent, making it one of the top gainers on the NSE index, as it would benefit from higher crude prices.
Falls tracked weaker global markets as the dollar continued to extend gains before a widely expected rate hike by the US Federal Reserve later this week.
“Trump’s comments on H1B visas have impacted sentiments now. IT was supposed to break out on the upside and many long positions were taken in the sector,” said Sangeeth V, an institutional sales trader with Paterson Securities.
Sentiment is also weak after crude crossed the $50 mark following an output-cut deal involving OPEC and other producers, he said.
A report by SMC Global said: “Asian share markets stumbled after initially opening higher on a surge in crude oil prices following an output cut deal reached at the weekend between OPEC and non-OPEC producers.
US stocks rose to fresh records on Friday, capping their best week since the presidential election. The gains extend a month-long rally for stocks as investors pour money into companies that benefit from stronger economic growth and fiscal stimulus. Producer prices in Japan picked up 0.4 per cent on month in November, the Bank of Japan said. That beat expectations for 0.3 per cent following the 0.1 per cent decline in 0.1 per cent in October.”