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Indian stocks dragged down by China border tensions, coronavirus cases; Fitch cuts outlook to negative

Staff Report/Dubai
Filed on June 18, 2020
Ratings agency Fitch cut its outlook for India to "negative" from "stable" on Thursday, saying that the coronavirus outbreak had an unfavourable impact on the economy. - Reuters

The NSE Nifty 50 index fell 0.18 per cent to 9,861.70 by 0350 GMT, while the benchmark S&P BSE Sensex was down 0.23 per cent at 33,428.25.

Indian shares fell on Thursday in a choppy trading session as investors fretted over a deadly border clash with China and a spike in coronavirus cases.

The NSE Nifty 50 index fell 0.18 per cent to 9,861.70 by 0350 GMT, while the benchmark S&P BSE Sensex was down 0.23 per cent at 33,428.25.

Ratings agency Fitch cut its outlook for India to "negative" from "stable" on Thursday, saying that the coronavirus outbreak had an unfavourable impact on the economy. "The coronavirus pandemic has significantly weakened India's growth outlook for this year and exposed the challenges associated with a high public-debt burden," Fitch said in a statement. It maintained its rating for India at 'BBB-'.

S&P 500 mini futures fell 1.2 per cent in early Asian trade while MSCI's broadest index of Asia-Pacific shares outside Japan lost as much as 1per cent as a spike in coronavirus infections in some US states and China dampened hopes of a quick economic recovery.

India and China said they wanted peace but blamed each other after soldiers of the two sides savagely fought each other on their Himalayan border, killing at least 20 Indian troops. The clash has renewed calls from local Indian trader groups to shun Chinese products, with China's Oppo cancelling the live online launch of its flagship smartphone in India on Wednesday.

The Indian government will bar Chinese companies from providing any telecom equipment to state-run telcos and may also prohibit private mobile phone operators from using gear supplied by the likes of China's Huawei and ZTE, according to a media report.

In early Mumbai trading, telecom stocks Bharti Airtel Ltd was up 0.26 per cent and Vodafone Idea Ltd rose 2.03 per cent ahead of a Supreme court hearing about dues it owes the government.

Meanwhile, Indian rupee opened flat at 76.15 per US dollar, quoting at Dh20.74 on Thursday against Wednesday's close of 76.16, amid flat trade witnessing in the domestic equity market on the back of border tension between India and China.

Indian shares ended a choppy session lower on Wednesday due to escalating border tensions with China and a spike in coronavirus cases at home and abroad. The NSE Nifty 50 index ended 0.33 per cent lower at 9,881.15, while the benchmark S&P BSE Sensex closed down 0.29 per cent at 33,507.92.
- With inputs from Reuters, business@khaleejtimes.com


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