Sensex, Nifty hit fresh intraday low; IT shares decline

Key benchmarks further extended losses and hit fresh intraday low in mid-morning trade. At 11:30 IST, the barometer index, the S&P BSE Sensex, was down 244.99 points or 0.65% at 37,737.75. The Nifty 50 index was down 89.50 points or 0.79% at 11,241.55.

The S&P BSE Mid-Cap index was down 1.40%. The S&P BSE Small-Cap index was down 0.99%. Both these indices underperformed the Sensex.

The market breadth, indicating the overall health of the market, was weak. On the BSE, 636 shares rose and 1425 shares fell. A total of 119 shares were unchanged.

IT shares declined. Persistent Systems (down 2.18%), TCS (down 1.42%), Oracle Financial Services Software (down 0.99%), HCL Technologies (down 0.87%), MindTree (down 0.81%), Wipro (down 0.72%), Infosys (down 0.56%), Tech Mahindra (down 0.32%) and MphasiS (down 0.15%), edged lower. Hexaware Technologies rose 0.27%.

Most pharmaceutical shares declined. Piramal Enterprises (down 3.01%), Lupin (down 2.27%), Wockhardt (down 1.67%), Dr Reddy's Laboratories (down 1.41%), Divi's Laboratories (down 1.24%), Cipla (down 1.21%), Sun Pharmaceutical Industries (down 1.08%), Aurobindo Pharma (down 0.93%), Cadila Healthcare (down 0.78%), GlaxoSmithKline Pharmaceuticals (down 0.54%), Alkem Laboratories (down 0.23%) and Glenmark Pharmaceuticals (down 0.11%), edged lower. IPCA Laboratories (up 0.26%) and Strides Shasun (up 0.94%), edged higher.

Overseas, most Asian stocks were traded higher on Wednesday following developments on the U.S.-China trade front. US stocks closed higher Tuesday on upbeat quarterly reports from Coca-Cola and United Technologies and on optimism the United States would resolve its trade conflict with China.

Talks between China and the U.S. would start Monday as U.S. negotiators headed to China, as per reports. The U.S. delegation will be led by Trade Representative Robert Lighthizer and will be in China through Wednesday. The world's two largest economies have been locked in a trade war that has seen 25% tariffs imposed by President Donald Trump on $200 billion of Chinese products. China has retaliated with their own tariffs prompting fears of a global economic slowdown.

In Europe, Boris Johnson was named the new British prime minister and his tenure, set to begin on Wednesday will have a huge impact across global markets and the geopolitical landscape. All eyes will be on his Brexit strategy and the composition of his cabinet.

The International Monetary Fund (IMF) said in its World Economic Outlook report that the global economy is expected to expand by 3.2% in 2019, down 0.1 percentage points from its April forecast and 0.3 percentage points below the estimate at the start of the year. The IMF cited concerns about the ongoing U.S.-China trade war and noted that global technology supply chains were threatened by the prospect of U.S. sanctions, Brexit-related uncertainty continued, and rising geopolitical tensions roiled energy prices.

Meanwhile, the IMF also projected a slower growth rate for India in 2019 and 2020, a downward revision of 0.3% for both the years, saying its GDP will now grow respectively at the rate of 7 and 7.2% reflecting a weaker-than expected outlook for domestic demand.

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