The benchmark equity indices Sensex and Nifty plunged heavily on Friday on a possibility of North Korea that it may conduct another hydrogen bomb test, this time in the Pacific Ocean. The benchmark Sensex shed 484 points to mark the day’s low of 31,886.09 points which is its biggest fall since 15 November 2016 — demonetisation period. The broader Nifty 50 index also fell, lost as much as 169 points to fell below 10,000 mark to 9,952.8 points. The major drag to the indices came from the heavyweight stocks such as Reliance Industries, L&T and ICICI Bank. The 30-share barometer Sensex ended down 1.38% at 31,922.44 points while the 50-share indicator Nifty settled 1.56% lower at 9,964.4 points.
The stocks of heavyweight companies such as ICICI Bank, Reliance Industries, L&T, HDFC Bank, SBI, Infosys, Axis Bank, ITC, HDFC, Hero MotoCorp, Hindustan Unilever, Tata Steel, Kotak Mahindra Bank, TCS, and Sun Pharma contributed the most to the Sensex decline. Collectively these 15 alone shaved off about 385 points out of the 447 point drop in the index. The 30-share barometer closed 447 points down or 1.38% at 31,922.44 points. Shares of Ultratech Cement, Yes Bank, Hindalco, Vedanta, Ambuja Cement, Tata Steel, ICICI Bank, Indiabulls Finance, Aurobindo Pharma, Tata Power, ACC, Bank of Baroda, GAIL, and Hero MotoCorp were the biggest loser on Nifty 50, fell up to 5%.
The geopolitical tensions edged up after US President Donald Trump authorized stiffer new sanctions in response to North Korea’s nuclear weapons advances, drawing a furious response from Pyongyang, Associated Press reported. North Korean leader Kim Jong Un retaliated by calling Trump “deranged” and saying he’ll “pay dearly” for his threats, while Kim’s foreign minister reportedly said the country might plan to test a hydrogen bomb in the Pacific Ocean.
Asian markets got their first chance to react to Standard & Poor’s announcement late Thursday that it was downgrading China’s credit rating, citing rising debt levels. S&P lowered its sovereign rating by one notch, to A+ from AA-, saying credit growth increased China’s economic and financial risks.
Most Asian stock markets fell Friday as investors turned cautious following new US sanctions targeting North Korea and credit rating downgrades for China and Hong Kong. Japan’s benchmark Nikkei 225 slipped 0.2% to 20,309.58 points and South Korea’s Kospi lost 0.9% to 2,385.22 points. Hong Kong’s Hang Seng shed 0.8% to 27,879.95 points and the Shanghai Composite fell 0.4% to 3,344.99 points. Australia’s S&P/ASX 200 added 0.5% to 5,675.7 points.