Tensions between India and China Has Cascading Effects on Indian Markets

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Tensions between India and China Has Cascading Effects on Indian Markets

Indian markets affected by the India-China scuffle

Wednesday, 17th June 2020

Reports of escalating tension between India and China that spiralled to violence and casualty of at least twenty Indian Army personnel caused domestic indices to slip into the red.


On opening, the Sensex tumbled nearly 80 points, though it sprang back a little within thirty minutes on Wednesday morning. Nifty too was hovering around little above 9,900 points. The market was acutely volatile the whole day primarily because investors turned edgy as a result of tensions at the border.


Companies that stood to lose the maximum in early morning trade were NTPC, PowerGrid, M&M, SBI, and L&T. Some, however, managed to gain much like Maruti Suzuki, Tech Mahindra, Wipro, Britannia, Axis Bank, Bharti Airtel and Infosys.


IIFL Securities personnel stated that the entire banking sector will be at risk in the coming days especially private banks like Axis Bank, ICICI Bank and Kotak Mahindra Bank will be the most affected.


The Indian Army reported that Indian soldiers got killed in Ladakh's Galwan Valley during a "violent face-off" with the Chinese PLA troops. Senior military officials of both nations are meeting to diffuse the situation in Ladakh. Chinese foreign minister Zhao Lijian however told Reuters that he was unaware of any such situation that his country was in with India.


Following these reports, investors have turned anxious and this is predicted to have rippling effects in Asian markets as well.


This, along with continued spike in the number of coronavirus positive cases in the country, has worsened matters, especially for investors, who are concerned that another wave of the infectious virus will again hit a number of countries. A renewal of the situation has been seen in Beijing, China, though it has shown impacts on only the Asian markets.


US markets on the other hand have had a sturdier session. This was mainly because of reports in the US markets about a common drug, dexamethasone, which is increasing chances of survival of infected patients. Reports suggest that the drug has been successful in reducing fatalities by 35% in patients who needed breathing machines and by 20% who were only in need of supplemental oxygen.



Source: India Today

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