CHENNAI: Extending their losing streak to the seventh day, Indian stock markets continued to tank with the Sensex and Nifty losing 439.95 and 135.75 points, respectively, on Wednesday. The benchmark Sensex closed Wednesday at its weakest (31,159.81) since June 30, while the Nifty closed at 9,735.75, a level last seen on August 11.
Investor sentiment in India’s bourses has been hit by a series of external and internal developments — including the steady flight of foreign capital, a falling rupee and military strikes along the Myanmar border.
US Federal Reserve chair Janet Yellen’s speech reiterating the Fed’s inclination to continue with gradual rate hikes was one factor, according to analysts. The rupee sank to a six-month low of 65.75 against the dollar during the day. So far this month, a net $777 million worth of Indian stock have been sold by foreign investors, with the trend set to continue.
While escalating tensions between North Korea and the US have generally depressed Asian markets over the past few weeks, the announcement that the Indian army has conducted operations along the Myanmar border has exacerbated fears of a conflict. “Updates of military action in the Eastern border impelled the market to hasten the market’s fall, which was already in a slippery slope ahead of F&O expiry. Sharp weakness in rupee and a rise in VIX also meant that risk takers were few,” observed Anand James, chief market strategist, Geojit Financial Services.
The recent stream of official macroeconomic data has done little to shore up sentiments. “The slowdown in GST tax collection dented sentiment and investors expected that the GST-led disruption is likely to extend and will hurt earnings for the next few quarters,” said Vinod Nair, head of research at Geojit Financial Services Ltd.