NEW DELHI: Domestic equities suffered deep cuts in opening deals on Monday following the trend in global markets where investors took money off the table amid worries of a slowdown in economy and concerns that the tension between the US and China may derail the prospects of a trade deal.
The exit polls on state assembly elections also kept markets on tenterhooks. Market is now bracing itself for the results that will be out on Tuesday.
Crude oil prices jumped in the global markets as Opec decided a cut in production from January.
Sensex plunged over 560 points in early deals and Nifty slipped below 10,550 on a fresh spell of all-round selling.
Around 9:20 am, the BSE Sensex was 623 points or 1.75 per cent at 35,050.25 around 9.55 am , while Nifty50 was 195.60 points or 1.83 per cent down at 10,498.10.
BSE Midcap and BSE Smallcap also plunged over 1 per cent.
Let’s take a look at factors that made market lurch lower sharply today:
Exit poll impacts sentiment
Market sentiment also got affected as exit polls on Friday indicated that the Bharatiya Janata Party risks losing control of Rajasthan to the Congress and faces a close fight in Madhya Pradesh and Chhattisgarh. Counting in five state assembly elections — Telangana and Mizoram being the other two — will take place on Tuesday.
Asian peers including Hang Seng, Nikkei and Shanghai were trading in red on Monday, tracking a sell-off on Wall Street fuelled by lingering concerns about the China-US trade standoff, while traders were also spooked by worse-than-forecast Chinese trade data. Hang Seng, Nikkei and Shanghai were down by up to 2 per cent in morning deals.
Oil prices again advanced on Monday, extending gains from Friday when producer club OPEC and some non-affiliated producers agreed on a supply cut of 1.2 million barrels per day (bpd) from January. Despite this, the outlook for next year remains muted on the back of an economic slowdown. International Brent crude oil futures were trading at $62.20 per barrel, up 52 cents, or 0.84 percent, from their last close.
The rupee opened 50 paise down at 71.31 against the dollar following a rise in crude oil prices, mounting trade worries and sustained dollar demand from banks and importers. India’s current account deficit widened to $19.1 billion in July-September, a five-year high against $6.9 billion in the year-ago quarter and $15.9 billion in April-June.
Foreign investors offloaded close to Rs 400 crore from the domestic equity market in the past five trading sessions amid weakness in global equities due to the arrest of a high-profile Chinese executive.