Mumbai: Indian equity markets closed lower on Wednesday ahead of the release of the gross domestic product (GDP) data for the first quarter of the financial year 2019-20 on August 31, which is expected to indicate slower growth rate for the fourth consecutive quarter. Weakness in global trade activity continued to impact metal stocks. The NSE metal index fell 3.36 percent, the struggling auto index declined 1.88 percent and banks scrips 1.14 percent. The Sensex closed 189.43 points or 0.50 percent lower at 37,451.84 and the Nifty settled 59.25 points or 0.53 percent lower at 11,046.10. “Despite the reversal in surcharge, Indian foreign portfolio investors (FPIs) continued to be net sellers due to global trade discrepancies, risk of recession and fall in bond yields, which are having a ripple effect on the market,” said Vinod Nair, Head of Research, Geojit Financial Services.
The consensus estimate of a drop in Q1FY20 GDP growth to 5.7 percent and weakening rupee impacted the investor optimism on earnings outlook, Nair added. Private lender Yes Bank declined the most on Wednesday by 7.47 percent to Rs 59.50 apiece after Moody’s Investors Service downgraded its foreign-currency issuer rating to ‘Ba3’ from ‘Ba1’. Shares of Kalpataru Power Transmission slumped nearly 7 percent after the company said it had received a notice from the World Bank over “process violations” in bids for two projects in Africa.
European stock markets slid, led by technology companies, on fears that major economies might be on the brink of recession. World stocks declined as deepening inversion of the US bond yield curve a day earlier threw up reminders of looming recession risks, sending investors toward safe havens, like the Japanese yen and precious metals, said Deepak Jasani of HDFC Securities. (IANS)