Key equity indices extended early losses and hit the day's low in morning trade. At 10:24 IST, the barometer index, the S&P BSE Sensex, was down 320.96 points or 0.84% at 38,044.39. The Nifty 50 index lost 86.85 points or 0.77% at 11,230.50.
The broader market tumbled. The S&P BSE Mid-Cap index fell 1.36% while the S&P BSE Small-Cap index was declined 1.80%.
Sellers outpaced buyers. On the BSE, 467 shares rose and 1682 shares fell. A total of 93 shares were unchanged.
Investors turned cautious after External Affairs Minister S. Jaishankar told the media that the current India-China border situation was "very serious". In a fresh sign of escalation, India and China reportedly accused each other of firing into the air on the border of western Himalayas.
The overnight selloff on Wall Street exacerbated the selling in domestic shares. Growing Sino-US tensions have contributed, to some extent, to the recent fall witnessed in the US markets. As per reports, US President Donald Trump launched a fresh broadside against China, promising a "decoupling" of the US economy from the Chinese one if he is re-elected in November.
Buzzing Index:
The Nifty PSU Bank index fell 2.84% to 1,397. The index has lost 12.8% in eight sessions.
Canara Bank (down 3.61%), SBI (down 3.53%), Indian Bank (down 3.43%), Bank of India (down 3.12%), CBI (down 2.97%), UCO Bank (down 2.68%), Bank of Baroda (down 2.65%), Jammu and Kashmir Bank (down 2.58%), Punjab National Bank (down 2.38%), Union Bank of India (down 2.26%) and Bank of Maharashtra (down 1.21%) declined.
Stocks in Spotlight:
Power Grid Corporation of India shed 0.43% to Rs 174.15. The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has approved monetisation of assets of Power Grid through Infrastructure Investment Trust (InvIT) model.
This approval would help Power Grid to monetise in the first lot, assets with gross block value of more than 7000 crore. These assets, which are mainly high voltage transmission lines and substations, are held by the PSU in form of special purpose vehicles (SPVs). The proceeds from the asset monetization would be deployed by Power Grid in their new and under-construction projects.
Reliance Industries (RIL) gained 0.94% to Rs 2126.90 after the company said Silver Lake will invest Rs 7,500 crore in Reliance Retail Ventures at an equity value of Rs 4.21 lakh crore. Silver Lake's investment will translate into a 1.75% equity stake in Reliance Retail Ventures Limited (RRVL) on a fully diluted basis, RIL said.
This marks the second billion dollar investment by Silver Lake in a Reliance Industries subsidiary after the $1.35 billion investment in Jio Platforms announced earlier this year. RRVL operates a retail business serving close to 640 million footfalls across its approximately 12,000 stores nationwide.
JSW Steel said that its crude steel production rose 5% to 13.17 lakh tonnes in August 2020 from 12.53 lakh tonnes in August 2019. Sequentially, the crude steel production increased 6% in August from 12.46 lakh tonnes in July 2020.
While the company's production of flat rolled products jumped 15% to 9.80 lakh tonnes, the production of long rolled products declined by 20% to 2.32 lakh tonnes in August 2020 over August 2019. "The average capacity utilisation during the month of August 2020 was 88%, the steel maker said.
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