Indian equity markets have no friend left either domestic or foreign. Domestic investors are miffed about the tax rules, while foreign investors are worried that the latest move on Article 370 will stoke tensions with neighbouring countries. The ongoing trade war between the US and China is making things worse.
Indian stock markets fell sharply but ended off lows while the rupee suffered its biggest one-day fall in six years against the US dollar, amid a global selloff in risk assets.
The Indian rupee ended today at 70.74 against the US dollar, as compared to its previous close of 69.60 a dollar – its biggest one-day fall in nearly six years.
The selling pressure in Indian markets was widespread. All the sectoral indices on the NSE, barring IT, ended in the red.
The broader markets also ended with sharp losses. BSE midcap and smallcap indices fell 1.3% and 1.7% respectively.
The scrapping of Article 370 notwithstanding, escalating Us-China trade tensions have been bogging down markets. “There is no earnings growth. A lack of stimulus and a lack of direction is a dangerous combination,” says veteran market expert Ajay Bagga. “After today, we are expecting some reforms as the focus comes back on the economy.”
Stock market volatility indicator India VIX index, also known as fear gauge, surged 9% to 16.54, indicating nervousness on the Street.