Indian stocks back to June 2014 level

Sensex sheds 109 points, Nifty down by 37 points as foreign investors pull out

Asian shares fell sharply on Monday after China's benchmark indices slid around six per cent amid increasing worries of a slowdown in the country. Indian equities remained volatile, with the BSE Sensex closing at its lowest level in one and a half years.

Last week, China's benchmark Shanghai Composite slid about 10 per cent, making it the worst performing index globally, and prompting intervention by circuit breakers twice during the week. On Monday it extended its losses by slipping another 5.3 per cent, after producer prices in the country fell for a record 46th month.

Indian shares tripped as well, with the BSE Sensex shedding 109 points, or 0.44 per cent, at 24,825 - its lowest closing level since June 4, 2014. The 50-share Nifty slid 37 points, or 0.5 per cent, and closed at 7,564. The Sensex had slumped 300 points intraday but recovered as the uptick in the European market lent support.

"Selling pressure continued on account of weak global markets and poor economic health of the Chinese economy. Global factors will lead to higher volatility in the coming days," said Jayant Manglik, president - retail distribution, Religare Securities.

Last week, Indian shares had seen their worst weekly pounding in four years as a result of the turmoil in the Chinese market. The Sensex and Nifty dropped 4.7 per cent in the first full week of 2016, their worst weekly performance since November 2011.

The global risk-off sentiment has spurred foreign investors to pull out money from the Indian market. On Monday, foreign institutional investors (FIIs) sold shares worth Rs 1,319 crore, while domestic institutional investors bought shares worth Rs 900 crore, provisional data shows.

Apart from the Shanghai Composite, Hang Seng (down 2.7 per cent), Straits Times (2.1 per cent) and Jakarta Composite (1.8 per cent) were the other major losers. Japan's equity market was closed for a holiday. European markets were trading in the green, up anywhere between 0.4 per cent and 0.5 per cent at 5.30 pm Indian Standard Time.

Back home, market breadth was weak with 1,225 advances compared with 1,581 declines on Monday. Twenty two of the 30 Sensex components ended in the red. All of the 12 BSE sectoral indices ended in positive territory, with the BSE Healthcare, BSE IT and BSE Tech losing more than one per cent each.

The market is likely to be volatile in the near term with investors awaiting Index of Industrial Production data for November and the Consumer Price Index data for December.

Market experts said the government will have to push ahead with its reform agenda to spur growth and revive investor confidence back to ensure India withstands the global turbulence.