Sensex, Nifty fall; global trade, political uncertainties weigh

By Arnab Paul

(Reuters) - Indian shares fell sharply on Monday and were set to extend losses to a fourth straight session as Asian shares dropped on fears of a global trade war and political uncertainty in Italy.

Asian equities fell to near three-week lows, after U.S. President Donald Trump pledged on Thursday to impose hefty tariffs on steel and aluminium imports, raising prospects of a global trade war.

Meanwhile, Italian exit polls pointed to a hung parliament that could cast the euro zone's third-largest economy into a political gridlock, hurting global risk appetite.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.84 percent. [MKTS/GLOB]

However, analysts said the weakness in Indian markets is temporary and a positive March-quarter corporate results would boost sentiment.

"The market is absorbing the negative global reports since there was a three-day break," said Krish Subramanyam, co-head and equity adviser at Altamount Capital. Indian markets were closed on Friday on account of a public holiday.

"However, March-quarter results are expected to be positive and with the Bharatiya Janata Party (BJP) doing well in the northeast, optimism will return."

India's ruling BJP on Saturday saw a landslide election victory in the northeastern state of Tripura, consolidating its position in the region ahead of next year's general elections.

The broader NSE Nifty was down 1.10 percent at 10,343.25 as of 0626 GMT, while the benchmark BSE Sensex was 0.96 percent lower at 33,721.55.

Losses were seen across most sectors with banks and energy stocks dragging the indexes. Yes Bank Ltd fell as much as 3.1 percent, while Oil and Natural Gas Corporation Ltd was down 2.9 percent.

The Nifty Metal Index was down 3.2 percent, with steelmakers such as Jindal Steel & Power Ltd and Steel Authority of India Ltd falling 7 percent and 5.7 percent, respectively. National Aluminium Co Ltd and Hindalco Industries Ltd were down 5 percent each.

Drugmaker Aurobindo Pharma Ltd fell as much as 5.5 percent after the U.S. Food and Drug Administration (FDA) said there were deficiencies in maintaining manufacturing quality standards at its Hyderabad facility.

Only five stocks were trading in the green on the NSE index, with Tata Consultancy Services Ltd rising 1.15 percent.

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