The tech-driven defeat in China also sent shockwaves to the European market as major indices traded about 1% lower.
Indian stocks ended the day after five days in the red as investors sold Chinese stocks amid rising Covid-19 cases and concerns over Federal Reserve rate hikes weighed down on the market. An overnight rise in US Treasury yields also sparked jitters. The yield on 10-year US Treasuries climbed above 2% for the first time in the past month on Monday.
While the Shanghai Composite fell 5% to hit a more than 20-month low, Hang Seng collapsed 5.7% to test its lowest level since February 2016. Both the Sensex and Nifty50 were down about 1.2%, while the broader mid-cap and small-cap indices outperformed slightly, falling less than 1%. While the Sensex dropped 709.17 points to 55,776.85, the wider Nifty ended the day 208.30 points lower at 16,663 points.
The severe sell-off in Chinese technology stocks, along with weakness in commodities such as copper and iron ore, dragged down both IT and metals stocks in India on Tuesday. While Hindalco Industries fell the most on Nifty50, Tech Mahindra, Infosys and HCL Technologies lost between 2-3%. Shares of Hindalco Industries adjusted 5.3% to close at a more than two week low of Rs 559.75 on the NSE.
Deepak Jasani said: “China’s tech stock price deepened, cutting billions of dollars from companies like Alibaba Group Holding and Tencent Holdings in Hong Kong, amid heightened concerns about an industry crackdown, Covid-19 outbreaks and China’s stance on the conflict in Ukraine.” , Head of Retail Research at HDFC Securities.
The cracks in tech stocks even increased after JPMorgan Chase downgraded 28 Chinese internet stocks, including Alibaba, Tencent Holdings and Meituan, to underweight, calling them “uninvestable” over the next six to 12 months due to mounting geopolitical and macro risks.
The tech-driven defeat in China also sent shockwaves to the European market as major indices traded about 1% lower. However, Dow Jones and Nasdaq futures moved higher on Tuesday. While copper on the London Metal Exchange fell 2.5%, aluminum fell 5.1%. Iron ore futures in Singapore also retreated.
More than two stocks fell on the NSE for every rise on Tuesday. Of the 2,109 shares traded, 1,462 scrips ended the day in the red. A sharp dip in the forward decline suggests that local investors also appear to have panicked, as the troubles of war appear not to end and the outcome of the US Fed meeting is only a day away, Jasani said.
Aside from the Auto and FMC gauge, all sector indices on the NSE lost value on Tuesday. While Metal fell the most with a 4.1% decline, IT followed with a 2.6% decline from the previous close.
This post Market update: Benchmarks end the day in the red after China’s sell-off on rising Covid-19 cases
was original published at “https://www.financialexpress.com/market/market-update-benchmarks-end-day-in-red-after-chinas-sell-off-on-rising-covid-19-cases/2462124/”