The cut across the market has deepened in afternoon trade. The Sensex is now down over 600 points and the Nifty is struggling below 25,900. The Indian markets are tracking their Asian peers that fell after US President Donald Trump’s meeting with Chinese leader Xi Jinping.
Key losers at this hour
At this hour, key losers from the Sensex pack include Bajaj Finance, which slipped 1.60%, and Bajaj Finserv, down 1.50%. Power Grid also declined 1.50%, while Bharti Airtel fell 1.88%. Among IT majors, Infosys dropped 1.30%, and Tech Mahindra was down 1.29%.
Here is a look at the key factors that are impacting investor sentiment.
1. Trump-Xi meeting – Chinese official comment indicates deal not done
While Trump said the meeting was “amazing” and had resolved many issues, investors appeared skeptical. Speaking after the meeting with China’s Xi Jingping, Trump told reporters he was cutting average tariffs on Chinese goods to 47% from 57%, effective immediately after his first face-to-face meeting with Chinese leader Xi Jinping in six years. However, the first official Chinese comment on the meeting suggested any deal is not done. China’s Commerce Ministry in a statement after the high-stakes meeting between Trump and XI, said, “The Chinese side will make corresponding adjustments to its countermeasures against these US tariffs.”
According to the latest on Reuters, Xi noted that negotiating teams from both countries had reached a consensus..The Chinese leader said the teams should complete follow-up work as soon as possible to deliver tangible results that will provide “peace of mind” to China, the U.S. and the rest of the world.
The Chinese President Xi, stressed that dialogue is better than confrontation and listed a range of issues where China and the US could work together, including combating illegal immigration and telecom fraud, anti-money laundering efforts, artificial intelligence and infectious disease response.
2. Rupee under pressure
Asian currencies are under pressure after the highly-anticipated U.S.-China trade deal failed to reassure investors. According to market observers, the currency traders are skeptical about a shift in tone, particularly from Trump and the fact that it could then quickly reignite tariff threats and trigger risk-off sentiment. The rupee has slipped further, close to the 88.50/$ level while the Dollar Index is now hovering 99 levels. This is the highest level for teh Dollar Index is more than a month. It is up over 1% in the last 1 month.
3. Pharma stocks under pressure
The pharma pack has seen deep cut in today’s trade. Dr Reddy’s has fallen nearly 5% and hit record lows after it received a notice of non-compliance from Canada’s Pharmaceutical Drugs Directorate for its ANDS for Semaglutide Injection. The notice outlined request for clarifications on specific parts of the submission. Semaglutide injection is Ozempic’s generic version and the investors are apprehensive given the time required to submit the review and the time taken by the regulator to review.