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Indian stock indices slumped sharply on Monday early trade, and continued to remain under pressure as the session progressed.
Sensex fell over 1,000 points at the time of filing this report. Nifty fell about 300 points. Nifty bank, auto, financial services, and realty were among the top losers today. Continued profit booking, escalation in geopolitical tensions in the Middle East, and fresh Chinese stimulus attracting FDIs are contributing factors behind the downtrend in the Indian benchmark indices on Monday, said Mumbai-based market expert Ajay Kedia. "Market is likely to move into a consolidation phase in the near-term. One significant factor that is influencing foreign portfolios is the outperformance of the Chinese stocks which is reflected in the massive surge in the Hang Seng index by around 18 per cent in September. This surge has been triggered by hopes of revival in the Chinese economy in response to the monetary and fiscal stimulus announced by the Chinese authorities," said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services. "This means FIIs may continue to sell in India and move some more money to better performing markets. FII selling is unlikely to impact the Indian market significantly since the massive domestic money can easily absorb whatever the FIIs are selling. Investors can use dips to buy quality largecaps which are fairly valued," said Vijayakumar. On Friday too, after logging sixth straight session highs, stock indices in India closed the week's trade marginally in the red, presumably attributable to profit booking. Prior to the latest slump, the US Federal Reserve's monetary policy committee loosening interest rate by steep 50 basis points, in particular, had been lending fresh support to Indian stocks. The steeper the rate cut in the US, the more the tendency to flight of capital to alternative investment destinations, including India. Continued buying by foreign portfolio investors (FPIs) also somewhat supported the stock indices. Foreign portfolio investments in the Indian stock market remained positive for the fourth consecutive month. (ANI)
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