The sell-off in Chinese tech stocks on Beijing’s regulatory crackdown has triggered concerns about whether this sell-off will spread to other segments. China is too big now. It can cause flutters in global markets, said an analyst.
“A significant trend in the market now is sectoral shifts. Yesterday there was a board selling pharma stocks. Profits booked in this segment are moving into other sectors. The relative outperformance in front line financials indicate a sectoral shift,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
How are the bluechips doing?
After opening in the red, benchmark indices dipped further lower. At 10.38 am, BSE flagship Sensex was down 581 points or 1.11 per cent to 51,997. NSE benchmark Nifty declined 160 points or 1.02 per cent to 15,586.
In the 50-share pack Nifty,
was the biggest gainer, up 2.38 per cent. Divi’s Labs, Coal India, Indian Oil, L&T, HUL, SBI Life Insurance, Tech Mahindra and were among other gainers.
Tata Consumer was the top loser in the pack, down 2.04 per cent. Cipla,
, HDFC, Adani Ports, Nestle India, Wipro, , Axis Bank, Britannia and TCS were other losers in the pack.
FACTORS DRIVING MARKETS
IMF forecast: The International Monetary Fund on Tuesday maintained its 6 per cent global growth forecast for 2021, upgrading its outlook for the United States and other wealthy economies but cutting estimates for developing countries struggling with surging Covid-19 infections.
Fed meet: Fed’s policy statement is due at 1800 GMT later in the day followed by a news conference by Chairman Jerome Powell. Investors will look for cues on when the central bank will begin to taper its monetary support.
US dollar: In currency markets, the US dollar sat below recent highs after a month-long rally. The safe-haven yen gained and the risk-sensitive Australian and New Zealand dollars dropped back. Analysts at CBA attributed the moves to falling risk sentiment on the back of the Chinese regulatory crackdown.
Broader markets
Broader market indices were trading mixed, outperforming their headline peers. Nifty Smallcap was up 0.03 per cent, while Nifty Midcap fell 0.21 per cent. Broadest index on NSE, Nifty 500 was down 0.35 per cent.
APL Apollo, Granules India, Trident, Sanofi, Polycab India and Syngene International were gainers from the space while Dixon Technologies, Ramco Cements, Adani Gas, Aarti Drugs, Chambal Fertilisers and Alkyl Amines were under selling pressure.
Global markets
MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.35 per cent in early trading, having fallen in each of the three previous sessions as regulatory crackdowns in China roiled stocks in the technology, property and education sectors, leaving international investors bruised.
Japan’s Nikkei slid 1.01 per cent, Chinese bluechips dropped 1.51 per cent, and Australian shares fell 0.43 per cent. Hong Kong bucked the trend, rising 0.63 per cent, after closing at its lowest level since November the day before.
