 "Market falls to 7-month low on selling by FIIs")
Despite firm global markets, the benchmark Sensex on Tuesday fell about 350 points from the day’s high, owing to a sell-off from foreign investors who, experts said, were reallocating their flows to more attractive markets.
The domestic market fell for a fifth straight trading session to its lowest level since September 2012, when the government had kick-started bold reforms such as a fuel price rise and opened the retail and aviation sectors to foreign investors.
On Tuesday, the 30-share Sensex climbed to a high of 18,565.56, before ending at 18,226.48, down 1.15 per cent compared to yesterday’s close. The 50-share Nifty, too, ended at a near-seven-month low of 5,495.1, a fall of 47.85 points, or 0.86 per cent. (IN THE RED)
“There is a buzz of some large foreign players selling after several months. This is really worrying the Indian market. As the Indian market doesn’t have the absorption capacity, selling by foreign institutional investors (FIIs) is getting magnified,” said U R Bhat, managing director, Dalton Capital Advisors.
This month, FIIs (net buyers on most occasions this year) sold shares on six of the seven trading sessions, taking out about Rs 1,500 crore. According to provisional data, on Tuesday, FIIs net sold shares worth Rs 665 crore in the cash segment.
“The government took a lot of measures to revive the economy. However, much hasn’t changed at the ground level. FIIs who put in a lot of money on hopes of a revival in the economy are now taking out of some of it,” said Sandip Sabharwal, chief executive (portfolio management services), Prabhudas Lilladher.
This month, the Sensex and the Nifty have lost about five per cent, even as markets in the US, the UK and Hong Kong gained about five per cent during the same period. “Monetary authorities across the world have been supporting growth. RBI (Reserve Bank of India) has not started doing that in a big way yet. We have seen high interest rates hurting growth. There is reallocation happening to other developed markets. Even emerging markets within Asia —Indonesia, Philippines and Taiwan — are doing well,” said Sabharwal.
Barring automobiles, all BSE sectoral indices, led by information technology, oil and gas and fast-moving consumer goods, ended with losses on Tuesday.
Wipro, ONGC, Infosys and State Bank of India contributed the most to the Sensex’s fall.
The Sensex has lost about 10 per cent from this year’s high on January 25. “The market may not look cheap enough on an absolute basis, with a mere 10 per cent correction from the recent peak. But the relative performance has been extraordinarily weak,” Credit Suisse stated in its India strategy report on Tuesday.
The brokerage said in domestic currency terms, India was ranked second-last in the year-to-date performance of 50 major markets. It had underperformed global markets for five consecutive months, Credit Suisse added.
The market might continue to remain weak in the short term, say market players. They added in the long term, it might fare better, as most central banks continued to have a loose monetary stance.
The domestic market fell for a fifth straight trading session to its lowest level since September 2012, when the government had kick-started bold reforms such as a fuel price rise and opened the retail and aviation sectors to foreign investors.
On Tuesday, the 30-share Sensex climbed to a high of 18,565.56, before ending at 18,226.48, down 1.15 per cent compared to yesterday’s close. The 50-share Nifty, too, ended at a near-seven-month low of 5,495.1, a fall of 47.85 points, or 0.86 per cent. (IN THE RED)
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Market players said foreign investors, who had invested about $10 billion since the beginning of the year due to a slew of measures taken by the government, had now started reducing their exposure to the Indian market, as the economic situation at the ground level continued to remain sluggish.
“There is a buzz of some large foreign players selling after several months. This is really worrying the Indian market. As the Indian market doesn’t have the absorption capacity, selling by foreign institutional investors (FIIs) is getting magnified,” said U R Bhat, managing director, Dalton Capital Advisors.
This month, FIIs (net buyers on most occasions this year) sold shares on six of the seven trading sessions, taking out about Rs 1,500 crore. According to provisional data, on Tuesday, FIIs net sold shares worth Rs 665 crore in the cash segment.
“The government took a lot of measures to revive the economy. However, much hasn’t changed at the ground level. FIIs who put in a lot of money on hopes of a revival in the economy are now taking out of some of it,” said Sandip Sabharwal, chief executive (portfolio management services), Prabhudas Lilladher.
This month, the Sensex and the Nifty have lost about five per cent, even as markets in the US, the UK and Hong Kong gained about five per cent during the same period. “Monetary authorities across the world have been supporting growth. RBI (Reserve Bank of India) has not started doing that in a big way yet. We have seen high interest rates hurting growth. There is reallocation happening to other developed markets. Even emerging markets within Asia —Indonesia, Philippines and Taiwan — are doing well,” said Sabharwal.
Barring automobiles, all BSE sectoral indices, led by information technology, oil and gas and fast-moving consumer goods, ended with losses on Tuesday.
Wipro, ONGC, Infosys and State Bank of India contributed the most to the Sensex’s fall.
The Sensex has lost about 10 per cent from this year’s high on January 25. “The market may not look cheap enough on an absolute basis, with a mere 10 per cent correction from the recent peak. But the relative performance has been extraordinarily weak,” Credit Suisse stated in its India strategy report on Tuesday.
The brokerage said in domestic currency terms, India was ranked second-last in the year-to-date performance of 50 major markets. It had underperformed global markets for five consecutive months, Credit Suisse added.
The market might continue to remain weak in the short term, say market players. They added in the long term, it might fare better, as most central banks continued to have a loose monetary stance.