Indian stock markets extended losses today as the Sensex tumbled over 1,200 points to hit the day’s low at 57,424. Nifty was struggling to maintain the 17,150 level amid strong selling pressure at Bajaj Finance, Bajaj Finserv, HDFC and HDFC Bank. India’s bond and forex markets were closed, while the central bank has rescheduled its monetary policy committee meeting by a day to February 8-10, citing a public holiday in Maharashtra.
Among the Sensex stocks, FII preferred stocks such as HDFC, HDFC Bank, Bajaj Finserv and Bajaj Finance were down between 3% to 3.5%.
“Indian market is witnessing sharp cut in today’s trading session and this weakness can be attributed to heavy selling by FIIs amid rising US bond yields and crude oil prices. If we look at the profile of stocks, there have been sharp cuts among the favorite names of FIIs and giants like HDFC twins, ICICI Bank, Infosys and Kotak Bank. Hence we can expect large FII sell-off figures in today’s trading session, however there is good buying in PSU banks, metal stocks and Chinese stocks where earnings were strong,” said Santosh Meena, Head of Research, Swastika Investmart Ltd. .
“If we talk about domestic cues the Budget was good and earnings momentum is strong, but the key question: “Is the market panicking ahead of the state elections?” Technically, Nifty slipped below its 50-DMA. However, 1,7200 is a support level where we can expect some correction otherwise selling pressure may extend towards 17,000/16,800 levels. On the upside, 17450-17500 is now a level. Will act as strong resistance.”
In the current phase of the FII-led sell-off, the value of the investor’s asset 7 lakhs have been wiped out in just three seasons.
European stock markets were mixed today. After Friday’s data showed the US created more jobs than expected in January, investors were wary of rising bets on the Federal Reserve’s interest rate hike.
US inflation data for January is due on Thursday and strong data could propel the Federal Reserve’s plan to raise interest rates, as a US employment report last month showed a jump of 467,000 jobs in non-farm payrolls.
“The 1.91% increase in the US 10-year bond yield reflects growing concerns of high inflation and the Fed being behind the curve. The January jobs report of 4.67 lakh new jobs in the US was well ahead of market expectations. It is now beyond doubt that the Fed will have to take tough action on inflation. If the Fed becomes overly aggressive and hikes rates by 50 bps in March, it could lead to a sharp correction in the markets,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
“FII selling is impacting the market in the short term, but not in the medium. FII has sold equity value 114100 crores from October 2021. But Nifty now remains where it was in early October 2021. FII sell-off is leading to a short-term gyration, but no significant impact in the medium-term.”
Meanwhile, the three-day meeting of the Monetary Policy Committee of the Reserve Bank of India is set to end on Thursday. The RBI is expected to keep its repo rate stable on Thursday, but many economists are expecting a hike in the reverse repo rate as part of the process of easing surplus liquidity that was pumped into markets earlier in the pandemic. .
Never miss a story! Stay connected and informed with Mint.
download
Our App Now!!
,