BENGALURU: Indian shares fell sharply on Monday afternoon, as a fresh flare-up on the disputed border between India and China wiped all gains that stemmed from optimism around the latest government directives to open up the country’s economy further.
The blue-chip NSE Nifty 50 index dropped 2.03% to 11,411.05 by 0815 GMT and the S&P BSE Sensex slid 1.92% to 38,710.37. Both indexes had climbed more than 1% earlier in the session.
India said it had foiled an attempt by Chinese troops to change the status quo on the ill-defined border between the two nuclear-armed countries.
“The market was trading in an over-bought zone, so a selloff was expected, and the news of fresh tensions at (the India-China) border has impacted sentiment,” said Rahul Sharma, market strategist and head of research at Equity99 in Mumbai.
Data on India’s June-quarter gross domestic product is expected at around 1200 GMT on Monday. Asia’s third-largest economy likely suffered its largest quarterly slump on record, the data is likely to show.
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