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Five factors why Sensex fell over 400 points, Nifty lost 137 points in trade today

Sectorally, auto and banking stocks were the top losers with BSE auto index falling 248 points and BSE bankex losing 241 points. On Nifty, top losers were Bajaj Finance, Sun Pharma and Bajaj Finserv.

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Five factors why Sensex, Nifty fell over 1% in trade today

The Sensex and Nifty fell over 1% in afternoon trade on the first trading day of this week. While the Sensex fell 422 points to 37,967, the Nifty lost 137 points to 11,452 level intra day. Top Sensex losers were Sun Pharma, IndusInd Bank and Vedanta Ltd. Of 30 Sensex stocks, 24 were trading in the red.

Sectorally, auto and banking stocks were the top losers with BSE auto index falling 248 points and BSE bankex losing 241 points. On Nifty, top losers were Bajaj Finance, Sun Pharma and Bajaj Finserv.

Market breadth was negative with 1036 stocks rising compared with 1569 falling on the BSE. 177 stocks were unchanged.

Last week, markets came under pressure with the Sensex losing 0.70% and Nifty falling 0.80% during the same period.

On an year-to-date basis, Sensex has gained 11.62% and Nifty has risen nearly 9%.

Here's a look at five factors why Sensex, Nifty fell in trade today.

President Trump's tariff threat: US President Donald Trump declared he was considering tariffs on an additional $267 billion in Chinese goods in addition to the $200 billion already facing the risk of duties, raising tensions between the world's two biggest economies. Additional duties on Chinese goods would hurt US manufacturers who use them as raw material and semi finished products in their factories. US stock indexes fell on Friday after President Donald Trump said he's ready to impose tariffs on essentially every good that's imported from China. The S&P 500 index fell 0.2 percent to 2,871.68, ending the day with its fourth straight loss. The Dow Jones industrial average shed 0.3 percent to 25,916.54. The Nasdaq composite was 0.3 percent lower at 7,902.54.

Strong US jobs report: The pace of hiring in the US quickened in August and wages grew at their fastest pace in nine years. The economy added a strong 201,000 jobs and the unemployment rate stayed at 3.9 percent, near an 18-year low, the government said on Friday in its monthly jobs report.  The strong jobs report signals the likelihood of faster interest rate hike by Federal Reserve.  The Fed looks certain to raise rates for the third time this year since late September.

Asian markets under pressure:  The intensifying trade war between the US and China led most Asian stocks lower on Monday. Japan's benchmark Nikkei 225 climbed 0.4 percent to 22,392.93, after the country's gross domestic product surpassed expectations by growing at a 3 percent annual rate in the April-June quarter. The Kospi in South Korea gained 0.2 percent to 2,285.51. But Hong Kong's Hang Seng index tumbled 1.3 percent to 26,636.63. The Shanghai Composite index fell 1.1 percent to 2,673.88. Australia's S&P/ASX 200 was less than 0.1 percent lower at 6,141.40.

Rupee in a free fall: The rupee weakened further to hit an all-time low of 72.64 against the US dollar, falling 91 paise in late morning trade today. The currency is down nearly 13% this year. Weakening of the home currency put Indian stock markets under pressure.

Widening current account deficit

India's current account deficit (CAD) widened to $15.8 billion, which is around 2.4 per cent of the country's Gross Domestic Product (GDP), in the quarter ending June as compared with $15 billion in the same quarter a year before. The weakening rupee against the US dollar and high crude oil prices in the international market swelled the current account deficit in the first quarter. Brent crude oil prices rose further to 77.79 USD/bbl or 1.25% higher in trade today. The oil prices have risen 6.83% during the last one month.

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