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Sensex, Nifty pulled down by political drama over government formation in Karnataka, global cues

FP Staff
Sensex was trading lower by 245.23 points, or 0.69 percent, at 35,298.71.

Mumbai: The BSE's benchmark Sensex and the NSE's Nifty were trading lower a little past noon, on Wednesday, amid uncertainty over government formation in Karnataka and sustained foreign fund outflows.

The 30-share Sensex was trading 0.45% lower to 35,384.77 points at 12:15 pm, while the Nifty was trading 0.57% lower to 10,740 points.

The benchmark Sensex tumbled over 245 points in morning trade on Wednesday, and traded 0.69 percent or  245.23 points lower to 35,298.71. The NSE Nifty fell 72.85 points, or 0.67 percent, to 10,729

Sectoral indices led by bankex, PSU, oil and gas and healthcare were trading in the red, down by up to 1.90 percent.

Brokers said that apart from political uncertainty in Karnataka, a weak trend at other Asian bourses following overnight losses at the Wall Street dampened sentiments.

Global markets were stumped after North Korea cancelled high-level talks with Seoul and threatened to call off the much anticipated summit with the US if it was pushed into unilaterally giving up its nuclear arsenal.

Back home, the trade deficit has widened to $13.7 billion in April, which further affected trading sentiment.

Prominent losers included Hero MotoCorp, ICICI Bank, SBI, Adani Ports, RIL, ONGC, Axis Bank, Bajaj Auto, M&M, Coal India, IndusInd Bank, NTPC and Bharti Airtel, falling by up to 3.27 percent.

Meanwhile, foreign portfolio investors (FPIs) sold shares worth a net Rs 518.47 crore, while domestic institutional investors (DIIs) bought shares worth Rs 531.33 crore yesterday, as per provisional data.

Among other Asian markets, Hong Kong's Hang Seng shed 0.49 percent while Japan's Nikkei was down by 0.38 percent in early trade today. The Shanghai Composite Index too inched lower by 0.25 percent.

The US Dow Jones Industrial Average ended 0.78 percent lower yesterday.

Rupee rebounds

The rupee rebounded by 27 paise to 67.80 per dollar in early trade on Wednesday on fresh selling of the US currency by exporters and banks. Yesterday, the rupee had lost 56 paise -- the second biggest single-day fall of 2018 -- to end at a new 16-month low of 68.07 as panic dollar demand rattled the currency market.

Traders said the dollar's strength against other currencies overseas, as a surge in the benchmark 10-year Treasury yield above 3 per cent reignited a rally that had lost steam last week, capped the rupee's gains.

On Tuesday, the Sensex soared more than 400 points in intra-day trade after leads showed that the BJP emerged as the single largest party in Karnataka. However, it gave up all its gains to end modestly lower after the Congress unexpectedly stitched up a post-poll alliance with the JD(S) and staked claim to form the government in the southern state.

With inputs from PTI

Also See: Sensex, Nifty close in the red after BJP's lead in Karnataka election narrows; Congress-JD(S) alliance could govern state

Sensex and Nifty erase Tuesday morning's gains after Congress says will support a JD(S) govt in Karnataka

Sensex zooms 290 points, Nifty tops 10,800-mark; metal, banking, capital goods, energy stocks in demand

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