Sensex and Nifty plummeted in the afternoon trade as geopolitical tensions rose after North Korea conducted its sixth and most powerful nuclear test on Sunday. We take a look at 3 reasons why Sensex tumbled over 300 points today.
Sensex and Nifty plummeted in the afternoon trade on Monday tracking a weaker trend in Asian markets as geopolitical tensions rose after North Korea conducted its sixth and most powerful nuclear test on Sunday. BSE Sensex fell nearly 331.92 points to 31,560.32 points while NSE Nifty fell 113 points to hit the day’s low of 9,861 points. Shares of Adani Ports (down 2.42%), Infosys (down 1.87%), Hero MotoCorp (down 1.65%), Asian Paints (down 1.3%), Tata Motors (down 1.48%), and Dr Reddy’s Laboratories (down 1.29%) were the top losers on the benchmark Sensex today. We take a look at 3 reasons why Sensex tumbled over 300 points today.
North Korea’s nuclear test
North Korea conducted its sixth and most powerful nuclear test which hammered the Asian markets very badly today. Tremors caused by the nuclear test in North Korea were at least ten times as powerful as the last time Pyongyang exploded an atomic bomb a year ago, Reuters reported citing Japan Meteorological Agency (JMA). The North called it a “perfect success” while its neighbors condemned the blast immediately. President Donald Trump threatened to halt all trade with countries doing business with the North Korea, secretly warned China, and faulted South Korea for its “talk of appeasement.”
Weaker regional markets
Most of the Asian stock markets fell on Monday following North Korea’s latest nuclear test which raised fears about risks to regional stability and prompted caution across Asian equities. Japan’s benchmark Nikkei 225 edged down 0.9% to finish at 19,508.25 points, while Australia’s S&P/ASX 200 lost 0.4% to 5,702 points. South Korea’s Kospi dipped 1.1% to 2,332.01 points. Hong Kong’s Hang Seng slipped 0.8% to 27,736.67 points, but Chinese markets ended at fresh 20-month highs with Shanghai Composite closing up 0.4% at 3,379.58 points.
Sell-off in blue-chip stocks
The heavy sell-off in the shares of heavyweight companies such as HDFC, HDFC Bank, Infosys, Kotak Mahindra Bank, Larsen & Toubro, Hindustan Unilever, ICICI Bank, Tata Motors, Axis Bank, and Adani Ports contributed the most to the decline of benchmark Sensex. Collectively these 10 stocks erased off over 176 points in the index while shares of Reliance Industries, Coal India, and ONGC helped the index to trim losses.