NEW DELHI: There was no silver lining for the equity markets that opened after a weekend having digested the Union Budget announcement on Friday.
Monday morning brought the bad news of 18,000 job cuts by Deutsche Bank across its equity teams, and Morgan Stanley saying it is betting on emerging market fixed income.
Indian markets, already fretting over lack of any explicit stimulus to aid growth, went into a tailspin, eroding Rs 5 lakh crore in market capitalisation in two sessions.
The BSE Sensex and the NSE Nifty lost over two per cent on Monday, on the back of losses they closed with after the budget session on Friday.
“It is like so many things happened together, and we are now getting into results season. Ultimately, it is the numbers that are going to be important,” said Anita Gandhi, Director, Arihant Capital.
The nervousness in terms of the slowdown was apparent as two stocks that fell the most among the NSE Nifty stocks were Bajaj Finance and Bajaj Finserv after Sanjiv Bajaj, in a television interview on Monday, said that Bajaj Finance had seen lower growth in the first quarter of the current financial year.
He also touched upon the fact that TV sales were lower than last year, and SME and rural lending were also seeing a slowdown, indicating an overall slowdown in credit.
The fact that FIIs were reluctant to commit to Indian markets in the last two weeks was a signal for correction in the markets, said Umesh Mehta, Head of Research, Samco Securities.
“Weight of valuation itself of large caps – the fractured nature of the current market set-up and lack of any positive triggers was one other factor which led to the fall,” Mehta said.