Indian equities extended losses as concerns on the slowing local economy and trade talks between the US and China dominated investor sentiment.
The benchmark S&P BSE Sensex dropped 1% to 37,068.93 at the 3:30pm close in Mumbai, its second day of declines.
The NSE Nifty 50 Index retreated 0.9% to 10,948.30.
The expiry of monthly derivatives contracts later today may have added to the volatility as traders close their positions or rollover bets to September.
Investor confidence remains fragile even as India plans steps to boost a slowing economy.
The Nifty is holding below its 50-, 100- and 200-day daily averages, while a flip-flop in global trade talks between the US and China is affecting foreign flows.
“This is the time to put your money where your mouth is because fear is the dominant factor to buy stocks,” said Sanjiv Bhasin, executive vice president for markets and corporate affairs at IIFL Securities Ltd.
“The key headwind is that eight countries have negative yields, and Europe in particular is showing no signs of turnaround,” he said. “That’s the elephant in the room.”
The Numbers Ten of the 19 sector indexes compiled by BSE Ltd dropped, with a gauge of banks falling the most.
Twenty-two of the 31 Sensex members and 29 of the 50 Nifty companies retreated.
State Bank of India’s 3.7% fall was the most among Nifty members, extending decline for the nation’s largest lender to more than 7% in 2019.
India will report GDP for the April to June period today.
Asia’s third-biggest economy is estimated to expand 5.7% from the same period a year ago, according to data compiled by Bloomberg, slower than the 5.8% pace in the previous quarter.
Traders rolled over 56% of their futures linked to Nifty as of 4:05pm compared with the past six months’ average of 72% on expiry, according to data compiled by Bloomberg.
The roll cost, or price to replace August futures with September, was 45 basis points versus a six-month mean of 65 basis points.
In India, contracts end on the last Thursday of every month.
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