Mumbai: Indian shares retreated on Wednesday, amid continuing weakness in global equities. The 30-share Sensex ended at 35,891.52, down 363.05 points or 1% while Nifty was at 10,792.50, down 117.60 points or 1.08%. Global markets slumped after evidence of slowing Chinese growth dashed investor hopes for an upbeat start to 2019. The disappointing data out of the world’s second-biggest economy appears to have dented investor optimism.

A Chinese manufacturing gauge showed factory output worsening in December amid ongoing trade tensions with the US.

South Korea’s Kospi, China’s Shanghai composite and Hong Kong’s Hang Seng index were down 1-3% on Wednesday.

“The domestic market consolidated in expectation of weak Q3FY19 results while weak GST collection and lower auto numbers supported the fear. Globally, weak China factory data and risk of further slowdown in world economy impacted global market which was weak," said Vinod Nair, head of research, Geojit Financial Services Ltd.

GST (goods and services tax) collection dropped to 94,726 crore in December 2018, lower than the 97,637 crore collected in the previous month.

According to JM Financial Institutional Securities Ltd, the budgeted target for the Centre may fall short by 1.5 trillion this fiscal.

“This will be the largest shortfall on the revenue front, other being telecom revenues and excise duty cuts, assuming the aggressive divestment target will be met through buybacks," it said in a note on 2 January.

BSE Auto index fell the most on Wednesday, down 3%, reacting to auto sales data in December.

A slight recovery in demand because of the reduction in fuel prices to almost a year’s low failed to offset negative factors such as high interest rates and insurance premiums, besides tight liquidity conditions, carmakers said on Tuesday.

“Passenger vehicle industry volumes grew only marginally in December 2018. Subdued festive season, a reduction in dealer inventory, and weaker consumer sentiment weighed on industry volumes," said Kotak Institutional Equities.

Meanwhile, the rupee fell sharply against the dollar, settling at 70.16 a dollar, down 74 paise from its previous close of 69.43.

Despite concerns on valuations, earnings, interest rates and elections, Indian markets have outperformed their global peers in 2018. What disrupted Asian equities last year was a global economic slowdown, China’s structural deceleration and potential escalation in the US-China trade conflict.

According to analysts, key themes that the markets are likely to be focused on in 2019 are earnings, pre-poll alliances, rate decisions, government spending and global cues.

Bloomberg contributed to the story.

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