The Indian stock market has slipped further in the afternoon session on January 2 with the Nifty50 down close to 150 points and the Sensex down about 450 points.
Nifty Metal and auto index were the underperforming sectors, down close to 3 percent dragged by Hindalco Industries, JSPL, JSW Steel, Tata Steel, NALCO and Vedanta.
Nifty Metal was down almost 3 percent in this afternoon session dragged by JSW Steel, Tata Steel and Vedanta which dipped over 3 percent. The other losers included NALCO, Jindal Steel & Power and Hindalco Industries that shed 1-2 percent.
The S&P BSE Metal index was down 2.4 percent with losses from Vedanta, JSW Steel and Tata Steel being the top losers followed by Hindalco, JPSL, NALCO, SAIL, Hindustan Zinc and Coal India.
Chinaâ€™s factory activity contracted for the first time in 19 months in December as domestic and export orders continued to weaken, a private survey showed, pointing to a rocky start for the worldâ€™s second-largest economy in 2019.
The gloomy readings largely dovetailed with an official survey on December 31 that showed growing strains on Chinaâ€™s manufacturing sector, a key source of jobs. The findings reinforce views that the economy is losing more steam.
The Caixin/Markit Manufacturing Purchasing Managersâ€™ Index (PMI) for December, released on January 2, fell to 49.7 from 50.2 in November, marking the first contraction since May 2017.
Economists polled by Reuters had forecast only a marginal dip from November to 50.1, just above the neutral 50-mark dividing expansion from contraction on a monthly basis. Chinaâ€™s official PMI showed factory activity contracted for the first time in over two years, also pressured by weak demand at home and abroad.
Research firm CLSA is of the view that deteriorating Chinese demand outlook is likely to weigh on commodity prices. The house has cut FY20-21 EPS estimates by 9-38 percent factoring in lower commodity prices and aÂ stronger rupee.
It has downgraded Tata Steel to â€˜Sellâ€™ from â€˜Buyâ€™ and has cut theÂ price target to Rs 460 from Rs 855 and has also downgraded JSW Steel to â€˜Sellâ€™ from â€˜Underperformâ€™ and has cut theÂ price target to Rs 260 from Rs 375.