In what could be seen as a thumbs down to the visiting US President Donald Trump, Indian stock exchanges crashed on Monday just as he and Indian Prime Minister Narendra Modi addressed Gujarat residents in Ahmedabad at Motera cricket stadium.
Market players say a variety of reasons including the spread of coronavirus and metal stocks losing ground were responsible for the steep fall in the key indices on Monday.
The Bombay Stock Exchange’s (BSE) Sensex fell by over 807 points, to 40,363, pulled down by the metal stocks, which lost their appeal amid the dimming prospects of the US-India trade deal. Similarly, Nifty – the 50-share index of the National Stock Exchange shed 242 points to close at 11,838.
BSE’s metal index slipped due to fears of an inventory pile up resulting from the spread of coronavirus fears and the lower likelihood of a India-US trade deal. The US had imposed tariffs on steel and aluminium imports from India.
Apart from taking the matter to the World Trade Organisation, India had also been engaging in deliberations with the US trade officials. With the reduced prospects of a trade deal between the two nations during the ongoing visit of US President Trump, the metal index of BSE slumped into the negative zone.
“The growing influence of coronavirus fuelled a stock market rout across the global markets, including India. Both the key benchmark indices, Sensex & Nifty, plunged 2% in a free-fall market today. Following a disappointing start, the mood turned gloomy and resulted in all the sectors ending in the red. Metal and auto sectors also faced the heat,” said Shrikant Chouhan, Senior Vice-President of Equity Technical Research at Kotak Securities.