Mumbai, India (BBN) – Indian shares fell on Monday, heading for their first drop in three sessions, 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 dampened after industrial output unexpectedly fell in October by 1.9 percent, driven down by a contraction in manufacturing and mining sectors, according to data released late on Friday, reports The Hindu Business Line.
At 2:40pm, the 30-share BSE index Sensex was down 259.73 points or 0.97 per cent at 26,487.45 and the 50-share NSE index Nifty was down 98.3 points or 1.19 per cent at 8,163.45.
All the broader and sectoral indices barring Nifty Realty and Nifty PSU Banks were trading in the red.Volatility was down 3.2 per cent with the India Vix quoting at 14.5850.
Among BSE sectoral indices, auto index fell the most by 1.92 per cent, banking 1.61 per cent, consumer durables 1.27 per cent and oil & gas 1.19 per cent.
Major Sensex losers were Asian Paints (-3.29%), Bajaj Auto (-2.56%), Tata Motors (-2.52%), Axis Bank (-2.44%) and Hero MotoCorp (-2.06%).
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.”