No-trust motion against PM Narendra Modi drags Sensex 146 points lower, Nifty below 11,000

The Sensex and Nifty settled lower on Wednesday, paring gains from earlier in the session, after the opposition parties tabled a no-confidence motion against Prime Minister Narendra Modi-led BJP government. Speaker Sumitra Mahajan said she would announce the date for a debate on it in "2-3 days".

Reacting to this, the broader Nifty slipped below its crucial 11,000 level. The 50-share index closed 0.25 per cent lower at 10,980.45, while the benchmark Sensex was down 0.4 per cent at 36,373.44. The Sensex touched a record-high of 36,747.87 in early trade.

In the broader market, the BSE Midcap index and the BSE Smallcap index underperformed to lose 1.3 per cent and 0.9 per cent, respectively.

Market breadth, indicating the overall health of the market, turned sharply negative. On the BSE, 1,704 stocks declined, 888 stocks rallied, while 135 stocks remained unchanged.

Material stocks were the biggest drag on the indices with Nifty Metal index dropping 3.2 per cent. Tata Steel ended 5.3 per cent lower. It was the top loser on Sensex and Nifty. Consumer stocks also fell with Hindustan Unilever finishing 2.3 per cent lower. 

"We expect markets to remain volatile in the near-term. On the global front, US-China trade war talks along with movement in crude oil prices would be keenly tracked by investors. The ongoing corporate earnings season will also result in stock specific volatility. Hence, we would advise traders to remain cautious and avoid risky leveraged positions," said Jayant Manglik, President, Religare Broking.

Meanwhile, foreign portfolio investors (FPIs) sold shares worth a net of Rs 673.99 crore yesterday, while domestic institutional investors (DIIs) bought shares worth Rs 840.06 crore, data released by stock exchanges showed.

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World stocks hit a one-month high on Wednesday as a bullish outlook from the head of the US central bank and rising company earnings buoyed the mood, lifted the dollar and sent safe-haven gold to a one-year trough.

Wall Street’s jump back above the psychologically significant 2,600-point mark was also keeping Europe’s spirits up ahead of another packed day of earnings and data in the United States.

London’s FTSE rose 0.5 per cent as the pound continued to suffer the Brexit blues, while Germany’s DAX climbed to a one-month high on hopes the European Union and US will cut a beneficial deal on car tariffs.

In Asia, Japan’s Nikkei had also hit a one-month peak as a weakening yen promised to fatten exporters’ profits.

(With inputs from Reuters)