Sensex falls as resurgent trade war fears weigh

By Arnab Paul

(Reuters) - Indian shares fell on Wednesday and were on track for a sixth straight session of losses, after a key advocate for free trade in the White House resigned, heightening fears of a global trade war.

Global equities fell after White House economic adviser Gary Cohn, seen as a bulwark against protectionist forces within the U.S. President Donald Trump's administration, announced his departure, and Trump said he would push ahead with his plan to impose heavy tariffs on steel and aluminium imports.

Jindal Stainless (Hisar) Ltd fell 4.77 percent and Hindalco Industries Ltd dropped 3 percent, with the stocks on course to extend their losses into a third straight session.

Competition in main export markets may force Indian steel exporters back to domestic markets and lower regional pricing, Jefferies said in a note.

Oil explorers such as Reliance Industries Ltd and Oil and Natural Gas Corp Ltd fell as much as 1.16 percent and 1.78 percent, respectively, as crude oil benchmark Brent futures shed 0.71 percent.

"Key indexes have been on a downtrend for the first time since November 2016 when demonetization happened," said Sudhakar Pattabiraman, head of research operations at William O'Neil's MarketSmith, referring to the Indian government's withdrawal of high-value notes.

"Weakness is seen across all sectors and global trends are adding to it. It is difficult to predict where Nifty will take support so we would advise investors to stick to the sidelines for now."

The broader NSE Nifty was down 0.62 percent at 10,185.5 as of 0635 GMT, while the benchmark BSE Sensex was 0.51 percent lower at 33,147.62.

Lenders including ICICI Bank and State Bank of India were among the top losers, retreating 3.3 percent and 2.7 percent, respectively.

Banking stocks, especially state-run lenders, have been hit by a $2 billion scam detected by Punjab National Bank (PNB) last month. Through Tuesday, the NSE PSU Bank index had fallen over 15 percent since PNB reported fraudulent transactions on Feb. 14.

The NSE Bank index closed below the 200-day simple moving average for the first time since Jan. 6, 2017 in the previous session.

(Reporting by Arnab Paul in Bengaluru; Editing by Amrutha Gayathri)