Sensex, Nifty give up most gains after positive opening, weak rupee boosts IT stocks

Banks are trading in the red, whereas IT is the big gainer of the day on the back of a weak rupee

Mumbai.

Markets opened flat after the rupee fell to its record low for third straight session amid global tensions.

The Indian currency opened at record-low of Rs 71.35 per dollar. It has declined 3.3 per cent in August and over 10 per cent year-to-date, emerging as the worst-performing currency in Asia.

Global stock markets fell for a fourth straight session on Tuesday, hurt by worries over the escalation of trade disputes and a deepening sell-off across emerging market currencies.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.2 per cent after European shares ended mostly flat, though a weak British pound helped to lift London’s blue-chip FTSE almost 1 per cent.

Japan’s Nikkei slid 0.3 per cent and Australian shares were 0.2 per cent lower. US markets were closed on Monday for Labor Day.

Growing turbulence in Argentina once again focused global attention on emerging markets. On Monday, Argentine President Mauricio Macri announced new taxes on exports and steep cuts to government spending in what he termed “emergency” measures to balance next year’s budget.

Meanwhile, US President Donald Trump gave fresh impetus to trade worries at the weekend when he said there was no need to keep Canada in the North American Free Trade Agreement and warned Congress not to meddle with the trade talks.

Trump was also reported to have said he is ready to impose tariffs on an additional $200 billion worth of imports from China as soon as a public comment period on the plan ends on Thursday.

Back home, the 10-year bond yields touched 8 per cent for the first time since December 2014, while the rupee hit a record low against the dollar even as the local equities fell sharply on Monday.

On the macro front, manufacturing growth eased for the second consecutive month in August, mainly on account of slower gains in output and decline in fresh orders, the widely tracked Nikkei purchasing managers’ index (PMI) showed. The index fell to 51.7 in August from 52.3 in July, as operating conditions improved at the slowest pace since May.

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