Sensex, Nifty End Lower Over Global Trade Uncertainties
The Indian stock market indices, Sensex and Nifty, closed lower on Friday, extending their losing streak to eight consecutive sessions. Despite initial gains, the markets ended the week in negative territory, influenced by concerns over US tariff policies and continued foreign portfolio outflows.
The Sensex, the benchmark index of the Bombay Stock Exchange (BSE), fell 199.76 points (0.26%) to 75,939.21. The Nifty, the benchmark index of the National Stock Exchange (NSE), declined 102.15 points (0.44%) to 22,929.25.
The losses were widespread across various sectors, with the Nifty Bank index falling 0.74% and the Nifty Financial Service index declining 0.62%. The Nifty Auto index, which has been a key performer in recent times, fell 0.45%, while the Nifty Metal index declined 0.43%.
The losses were attributed to the uncertainty surrounding global trade policies, particularly the ongoing trade tensions between the United States and China. The US has been imposing tariffs on various Chinese goods, which has led to retaliatory measures from China. This has created uncertainty for investors, leading to a decline in risk appetite and a subsequent decline in stock prices.
Additionally, the continued foreign portfolio outflows also weighed on the markets. Foreign institutional investors (FIIs) have been selling Indian stocks, which has led to a decline in the value of the rupee against the US dollar. This has made Indian stocks less attractive to foreign investors, leading to a decline in their demand.
The rupee, which has been under pressure due to the widening trade deficit and the ongoing foreign portfolio outflows, fell 0.23% against the US dollar on Friday. The Indian rupee closed at 71.15 against the US dollar, its lowest level in over two weeks.
The decline in the rupee has made imports more expensive, which could lead to higher inflation and interest rates. This could have a negative impact on the economy, particularly for the manufacturing sector, which is heavily reliant on imports of raw materials and intermediate goods.
The decline in the markets also led to a decline in the value of Indian stocks. The market capitalization of the BSE fell by over 1% on Friday, to Rs 1,45,35,429 crore. The market capitalization of the NSE also fell by over 1% to Rs 1,44,11,424 crore.
The decline in the markets has also led to a decline in the value of the Indian bond market. The yield on the 10-year government bond fell by 3 basis points to 6.44%, while the yield on the 30-year government bond fell by 2 basis points to 7.24%.
The decline in the bond market has led to a decline in the value of the Indian rupee, which has made imports more expensive. This could lead to higher inflation and interest rates, which could have a negative impact on the economy.
In conclusion, the Sensex and Nifty closed lower on Friday, extending their losing streak to eight consecutive sessions. The decline was attributed to the uncertainty surrounding global trade policies and the continued foreign portfolio outflows. The decline in the markets has also led to a decline in the value of the Indian rupee, which has made imports more expensive. This could lead to higher inflation and interest rates, which could have a negative impact on the economy.
