Indian shares slipped on Thursday, led by declines in financials and metals, as fears of an impending global recession and worsening Sino-U.S. trade relations marred investor sentiment.
The broader NSE Nifty fell 0.46% to 10,994.55 as of 0354 GMT, while the benchmark BSE Sensex inched down 0.44% to 37,293.80.
Meanwhile, stocks in regional markets across Asia struggled to recover with MSCI’s broadest index of Asia-Pacific shares outside Japan trading flat.
Domestic investors also remained cautious ahead of GDP data for the April-June quarter due on Friday.
“Sentiment is a fair worry, consumer and business sentiment has to change,” said Sunil Sharma, chief investment officer at Sanctum Wealth Management in Mumbai.
“The outcome of the trade war is also uncertain.”
The weather office on Wednesday said monsoon rains in India were below average for the first time in five weeks in the week through Wednesday, further dampening spirits.
Monsoon rains are key to farm output and economic growth as the agricultural sector accounts for about 15% of India’s $2.5 trillion economy.
Indian markets are likely to see some volatility ahead of August derivative contracts’ expiry.
Shares of Indiabulls Housing Finance Ltd slipped as much as 7.97%, the stock will not be included on the Nifty 50 NSE Nifty from Sept. 27.
The Nifty metals index inched 0.82% lower, with all 14 constituents trading in the red.
Only 10 of the 50 stocks on the NSE blue-chip index were trading in postive territory.
Meanwhile, sugar producers like E.I.D.-Parry (India) Ltd gained as much as 2.45% and Rana Sugars Ltd surged 6.98% after India’s cabinet approved incentives of 62.68 billion rupees ($876.74 million) to help cash-strapped mills to export 6 million tonnes of sugar in the 2019/20 marketing year starting from Oct. 1.
Shares of Sun Pharmaceutical Industries Ltd was the top gainer on the NSE index, rising as much as 4.49%. Media reports here on Thursday said an enquiry by the Securities and Exchange Board of India (SEBI) had found no merit in allegation of violation of securities laws by the firm.
On Wednesday late evening, India’s federal cabinet approved further liberalizing of foreign direct investment (FDI) rules in digital media, coal mining, associated infrastructure and sales of fuels in an attempt to get economic growth back on track.