Investors turn jittery over high valuations, inflation
India’s benchmark indices declined for the third consecutive day on Thursday, led by losses in index heavyweights Reliance, Infosys, and TCS, amid investors’ concerns over high valuations and the impact of inflation on corporate profits and economic recovery. A rally in banking shares helped offset some losses.
After dropping as much as 774 points, the Sensex ended the session 336 points, or 0.5 per cent, lower at 60,923, while the Nifty fell 89 points to close at 18,178. In the last three sessions, the Sensex has declined 842 points, or 1.4 per cent, while the Nifty has dropped 299 points or 1.6 per cent. The Nifty Midcap 100 and the Nifty Smallcap 100, on the other hand, have plunged close to 6 per cent in three days.
Domestic institutional investors (DIIs) have sold shares worth about Rs 9,000 crore in the last nine trading sessions. On Thursday, DIIs turned net buyers to the tune of Rs 428 crore, but foreign portfolio investors (FPIs) sold shares worth Rs 2,819 crore, taking their nine-day selling tally to Rs 4,482 crore.
Market observers said retail investors continued to remain strong buyers in the market in a bid to 'buy the dip'. However, they were not able to offset the massive selling by DIIs and FPIs over the past few days. If the markets continue to correct, retail investors, too, could turn sellers, adding more downward pressure to the market, experts said.
Prior to the latest correction, the Sensex and the Nifty had gained for seven straight trading sessions, logging record highs of 61,766 and 18,477, respectively.
Institutional investors are prompted to take some money off the table given the sharp up-move seen last week, analysts said. Profit booking was more prominent in certain pockets that had seen frenzied buying.
On Wednesday, global brokerage UBS in a note said valuations of Indian equities had turned extremely expensive and the market had become unattractive.
No comments:
Post a Comment