NEW DELHI: India’s equity market failed to withstand global pressure as benchmark indices - Sensex and Nifty - cracked over 1% during the last 75 minutes of Tuesday’s trading session. The Sensex fell nearly 850 points, or 1.46%, to close at 57,147 points, while the Nifty50 shed around 250 points, or 1.49%, to end below 17,000, at 16,983.
The fall is attributed to investors’ reluctance to bet big on Indian market due to rising geopolitical turmoil, weak global market, US Federal Reserves’ hawkish stance on rate hikes to control inflation and slowdown in global economic growth. Major Asian stock exchanges like Japan’s Nikkei 225 and Hang Seng China Enterprises Index fell 2.6%.
Investors have also gone into cautious mode ahead of domestic retail inflation data announcement, which as per some estimates is expected to remain over 7% for the month of September. “There is pessimism in the markets as weak global economic outlook along with the pressing geo-political tension and the dangling rate hike worries has given investors the ammunition to exit equities at will,” said Shrikant Chouhan, head of equity research (retail), Kotak Securities. Foreign institutional investors’ exodus from the local market surged on Tuesday as they offloaded shares worth Rs 4,613 crore.
Kotak, in a recent report, had noted the growing rhetoric of India decoupling from the rest of the world may not bear out. It believes more than domestic factors, external factors such as global slowdown, geopolitics-led risks to energy prices, dollar strengthening, and higher-for-longer global inflation and rates (implying risks of lower-for-longer global growth) will weigh on India’s macro outlook.Ajit Mishra, VP - Research, Religare Broking, said,
“As we’re not seeing respite on the global front, any disappointment on earnings or the macroeconomic front may put further pressure.” On Wednesday, traders would keenly watch the market’s reaction on IMF’s 60 bps cut to its gross domestic product (GDP) growth forecast for India (now at 6.8%) for the current financial year.
Indian markets
The fall is attributed to investors’ reluctance to bet big on Indian market due to rising geopolitical turmoil, weak global market, US Federal Reserves’ hawkish stance on rate hikes to control inflation