The Indian markets continued to fall for the third consecutive trading session on the back of consistent selling by foreign institutional investors (FIIs). On Thursday, the Sensex closed at 66,230.24 points, down by 570 points or 0.85%. The Nifty closed at 19,742 points, down 159 points or 0.80%. Over a three-day period, the Sensex has lost 1,608 points or around 2.4%, leading to loss in investor wealth by Rs 5.5 trillion.
FIIs sold to the tune of Rs 3,000 crore on Thursday (provisional figures). On the previous two trading sessions, they sold equities of Rs 3076 crore ($ 89.60 million) and Rs 746 crore ($369.45 million). In September alone, FIIs have sold stocks of over Rs 12,000 crore or $1.5 billion.
He believes that in the near-term, these developments could impact the market adversely.
Added U R Bhat, co-founder and Director at Alphaniti Fintech,” The US Federal Reserve’s hawkish stance indicates chances of a hike, despite expectations of rates having peaked. FPIs had been investing at a stretch but now may be looking to reduce their exposure. The Indo-Canadian stand-off is another negative, as investments from Canada stand at $25-30 billion. While the investments are yet to be liquidated, there is a risk of further selling.”
He further said that markets usually underperform in the run-up to elections, which is why there could be some loss in momentum till the outcome.
All the other indices closed in the red today. The BSE Midcap and Smallcap indices were down almost one percentage point.
Banks led the slide in the Sensex with ICICI Bank, State Bank of India, IndusInd Bank and Kotak Mahindra Bank falling between 1.9% and 2.8%. Mahindra & Mahindra was the biggest loser by falling at over 3%.
Tech Mahindra led the list of gainers with rising 1.46%, followed by Asian Paints, Infosys, Bharti Airtel and HUL that rose marginally.
Said Sudip Bandyopadhya, Group Chairman, Inditrade Capital,” I am not too perturbed by the current selloff because fundamentally things haven’t changed. But what is happening is that people are pulling outmoney of emerging market funds due to instability in China. At the same time, money is also coming into India-dedicated funds. So, there is a churn happening.”
He believes that the main worry for India is the rise in the crude oil prices that could hurt the economy if it continues moving northwards, and as a result, hurt markets. “Rest is under control,” he added.