Indian shares pared some of its losses in the afternoon session on Monday, supported by gains in the IT stocks, but continued selling by overseas investors in domestic equities weighed on investor sentiment.
The Nifty50 index, which has been under pressure since Union Budget and has fallen 6 percent in July, turned negative for 2019 and was down 0.5 percent for the year.
In intra-day trade, the Nifty50 fell as much as 1.9 percent to the day's low of 10,782.60, slipping below the crucial 10,800 level. Losses in broader Asian markets amid escalating Sino-US trade tension and unrest in Jammu & Kashmir were the key factors for the fall today.
At 1:00 PM, the BSE Sensex fell 452 points at 36,666, while the broader Nifty50 index lost 136 points at 10,864.
Prime Minister Narendra Modi's government has proposed to revoke Article 370 and Article 35A, which gives special rights and privileges to the citizens of Jammu and Kashmir in government jobs and land.
During the day, YES Bank, Tata Motors, PowerGrid, Zee, and Reliance were the top losers on the Nifty50 index. For the year, YES Bank, Indiabulls Housing, M&M, zee, and GAIL stocks have lost the most.
Among the sectors, banking, media, and realty indices declined the most during the day, whereas, for the year, auto, metal and media sectors shed the most.
Going ahead, markets will closely watch the outcome of RBI monetary policy review meeting, scheduled on August 7. Analysts are hopeful of a 25 basis point cut this time as well, citing low inflation and weak growth.
Globally, Asian share markets were in a sea of red today with Japan’s Nikkei shedding 2.4 percent to the lowest since early June. It was the sharpest daily drop since March.
The trade dispute between the world’s two largest economies has already disrupted global supply chains and slowed economic growth. Global markets got spooked after US President Donald Trump abruptly declared he would slap 10 percent tariffs on $300 billion in Chinese imports, ending a month-long trade truce. China vowed on Friday to fight back.