Sensex, Nifty decline amid slump in global markets on geopolitical tensions
Mumbai: Indian markets declined on Monday as global markets fell amid heightened geopolitical tensions between the US and North Korea. However, the markets pared some of the losses at the time of closing.
BSE Sensex closed lower by 190 points, or 0.60%, to 31,702, while the Nifty 50 fell 62 points, or 0.62%, to 9,913.
Global markets slumped after North Korea’s test of a nuclear bomb on Sunday. Following the test, US President Donald Trump threatened to increase economic sanctions and halt trade with any nation doing business with North Korea. Nikkei and Hang Seng indices fell nearly 0.9% each.
India VIX surged 19%, its biggest jump since 29 September 2016, to 13.96.
“This fall is due to the North Korea nuclear test. Investors will wait and watch for more cues,” an analyst said, on the condition of anonymity.
According to a Bloomberg report, South Korea detected that North Korea is continuing to prepare for a possible intercontinental ballistic missile launch, a move that would further raise tensions.
“North Korea’s nuclear test on Sunday had an estimated strength of 50 kilotons. That would make it five times the size of the North’s previous test in September last year, and more than three times bigger than the US device that destroyed Hiroshima in 1945,” the report added.
All the BSE sectoral indices fell. BSE Realty was the top loser with 1.39% decline, followed by BSE Telecom and BSE Basic Materials, which were down 1.32% ad 0.66%, respectively.
Coal India Ltd rose 3.38% after stronger production and offtake data for August month. Coal production stood at 37.63 million tonnes (mt) against its target of 36.96 mt, while offtake came at 43.75 mt from 43.09 mt its estimated target.
So far this year, the Sensex has gained 18.9% and Nifty 20.88%. Since the beginning of 2017, foreign institutional investors have bought a net $7.16 billion of Indian stocks and local mutual funds and insurance companies have invested Rs42,554.28 crore.