Mumbai– A global market sell-off on the back of US political developments coupled with fears of fresh banking sector non-performing assets (NPAs or bad loans) and profit booking led to a sharp decline in the Indian equity markets on Wednesday.

Both the key indices — the S&P BSE Sensex and the NSE Nifty50 — declined by over 1 per cent.

Moreover, selling in the Indian equity market intensified after the Asian Development Bank (ADB) slashed India’s growth forecast for fiscal 2019-20 to 6.5 per cent from 7 per cent projected in July.

The S&P BSE Sensex closed at 38,593.52, lower by 503.62 points or 1.29 per cent from the previous close of 39,097.14 points. It had touched an intra-day high of 39,087.20 and a low of 38,510.97 points.

Similarly, the Nifty50 on the National Stock Exchange (NSE) closed flat. It ended the day’s trade at 11,440.20, lower by 148 points, or 1.28 per cent, than its previous close.

On the broader market level, the BSE Mid and Small Cap Indexes underperformed as compared to the Sensex and Nifty. However, the market breadth was negative on both the key indices.

Sectorally, the top gainers were the BSE Power and IT indices, whereas the losers included the Auto, Realty, Metal and Capital Goods indices.

“The weakness came on the back of weak global cues as US political developments and tougher tones from the Washington and Beijing on a trade deal spoiled investor sentiments,” said Deepak Jasani, Head Retail Research of HDFC Securities.

“Technically, while the Nifty has corrected, the underlying trend remains up. Further upsides are likely once the immediate resistance of 11,565 is taken out. Crucial support to watch for further weakness is at 11,416,” he added.

According to Geojit Financial Services Head of Research Vinod Nair, “political uproar in US to impeach president Trump led to sell-off in the global market.”

“Fresh NPA issues, weak September auto sales and monthly expiry prompted investors to book profit post the sharp upside since last Friday. Bond yields are inching higher anticipating fiscal tightness, while the government is planning higher divestment to ease the situation.” (IANS)