Markets slump after new Trump threat; HDFC Bank, RIL, TCS lead losses

Equity benchmark indices Sensex and Nifty declined for the third session in a row on Friday, dropping nearly 1 per cent, dragged by heavy selling in information technology (IT), auto and energy stocks amid a muted start of the earnings season.

 

Renewed concerns over the US trade policy after President Donald Trump announced a 35 per cent tariff on certain products from Canada and raised the prospect of increasing levies on most other countries.

 

Tariff-related uncertainties and mixed global market trends also added to the pressure, analysts said.

 

The 30-share BSE Sensex tanked 689.81 points or 0.83 per cent to settle at 82,500.47. During the day, it fell 748.03 points or 0.89 per cent to 82,442.25.

 

As many as 2,450 stocks declined while 1,557 advanced and 158 remained unchanged on the BSE. Similarly, the 50-share NSE Nifty dropped 205.40 points or 0.81 per cent to 25,149.85. 

 

The Sensex on Friday ended the session at 82,500, with a decline of 690 points, or 0.83 per cent. The Nifty 50 index, meanwhile, ended the session at 25,150, with a drop of 205 points, or 0.8 per cent. 

 

For the week, the Sensex declined by 1.1 per cent and Nifty by 1.2 per cent. Both the indices posted their second continuous weekly decline for the first time since the week ended April 11.

 

The total market capitalisation of BSE-listed firms declined by ₹3.6 trillion to ₹456.7 trillion. For the week, the market capitalisation fell by ₹4.5 trillion.

 

Trump on Thursday announced a 35 per cent levy on goods from Canada that are not traded within the rules of the US-Mexico-Canada agreement. 

 

Further, Trump announced that he is eyeing blanket tariffs of 15 to 20 per cent on most trading partners. At present, the minimum tariff rate for nearly all US trading partners is 10 per cent. The announcement is seen as an indication of no retreat from his flagship economic policy.

 

The dollar index was trading at 97.73, its highest level in more than two weeks. Gold was trading at $3,354 per ounce, a gain of 0.9 per cent. The renewed escalation of trade tensions comes at a time when the appetite for Indian equities remains strong.

 

“The lingering uncertainty around trade negotiations is likely to keep markets in a consolidation mode. Investors will now focus on key domestic macro data, including CPI and WPI inflation prints while tracking ongoing earnings and updates on the India–US trade deal. As the earnings season progresses, markets are expected to witness volatility driven by stock-specific factors,” said Siddhartha Khemka, head, research of Wealth management of Motilal Oswal Financial Services. 

 

Foreign portfolio investors (FPIs) were the net sellers to the tune of ₹5,104 crore, the biggest single-day selling since June 24. Domestic institutions were the net buyers of ₹3,559 crore. 

 

HDFC Bank, where FPIs hold significant stakes, fell by 1.1 per cent and was the biggest contributor to Sensex’s decline.

 

Reliance Industries (RIL), which fell by 1.5 per cent, and TCS, which slumped by 3.5 per cent, were the other major contributors to the decline.

 

TCS was also the worst-performing Sensex stock amid weak earnings. The Nifty IT declined by 1.8 per cent.

 

“The domestic market experienced a negative close due to a sober start to earnings season and a ramp up in the tariff threat by the US. Investors may continue to be focused on quarterly earnings for a buy-on-dips strategy; however, in the near term, the current premium valuation and the global headwinds like low spending and tariff uncertainties may restrain new inflows,” said Vinod Nair, head of research of Geojit Investments.

 

The market breadth was weak, with 2,516 stocks declining and 1,503 advancing on BSE.