After the previous week’s volatility, markets on Monday continued to be weak with the BSE benchmark Sensex falling over 109.29 points, or 0.44%, at 24,825.04 — its lowest level in almost 18 months — on prolonged concerns over slowing growth in China.
The broader NSE Nifty closed at 7,563.85, down 37.50 points or 0.50%.
The Sensex opened weak, tracking losses in other Asian markets, and hit an intra-day low of 24,598.90. It pared some losses in late afternoon trading with value-buying in some blue-chip stocks such as Reliance Industries, Tata Motors and Maruti Suzuki, but still closed in the red.
The indices fell for the fifth time in six days to extend the last week’s steepest loss in more than four years.
The weak trend was despite positive news flow from the US where a rise in non-farm employment in December was overshadowed by China’s consumer inflation, which edged up to 1.6% in December from 1.5% in the previous month.
China’s producer price index, a measure of cost for goods at the factory gate, also fell 5.9% in December, the country’s National Bureau of Statistics said on Saturday, marking a 46th straight month of decline. An official survey had last week said that China’s manufacturing sector had contracted for a fifth month triggering a sharp sell-off in markets worldwide.
The slowing growth in China also weighed on crude oil prices, which fell for the sixth session to trade at almost 12-year lows. Brent crude oil futures were down 63 cents at $32.92 a barrel.
“This week looks no better as strong US data coupled with weak Chinese data is spooking investor confidence,” said Sageraj Bariya of East India Securities.
Apart from global worries, markets will also look for cues from the third quarter earnings season that kicks off with India’s largest software services exporter TCS, and private sector lender IndusInd Bank reporting their earnings on Tuesday.
Analysts are not expecting any major recovery in the corporate earnings at least for the December quarter.
“Weak rural and industrial demand as well as tepid export growth is likely to continue weighing on revenue growth of the companies. Profit growth would be driven by soft material and commodity prices,” said an analyst with Kotak Securities.
The rupee ended lower by 18 paise to 66.81 against the US currency on fresh dollar.
Elsewhere, while Japanese markets were closed for a holiday, other Asian markets ended in the red. In mainland China, the Shanghai Composite Index fell 5.33%, whereas Hong Kong index ended 2.76% lower.