IMF’s growth estimates sink stock markets
By S Jha
New Delhi, October 11: The Indian stock markets sought to ride the firm open interests in the IT stocks to recover the lows of the say, but the foreign institutional investors dumped the equities in the last one hour of trade. While Sensex closed the day with a loss of 843 points, Nifty took dropped by a whopping 257 points.
The massive sell off in the last hour of the trade came on the back of the International Monetary Fund’s Report on global growth outlook and also the worsening economic situations in the UK, which is already in the firm grip of recession with historic low unemployment and highest vacancies of jobs. The IMF Report further scaled down the World Bank’s growth outlook, which had already been lowered from the previous estimates.
India’s economic growth estimate for the current financial year has been estimated by the IMF at 6.8 per cent, which is below the estimate of the Reserve Bank of India of seven per cent. The IMF has already stated that India’s GDP growth in the next financial year would be six per cent. Worse, the IMF said that the inflation is yet to peak.
The FIIs went into a selling spree on the bourses, with a net sell of Rs 4613 crores. The domestic institutional investors, who behave exactly opposite of the FIIs, had a net buy of Rs 2431 crores on Tuesday.
The stock markets ignored the better than expected quarterly result of the IT behemoth TCS and also spike in the open interests of Wipro and Infosys during the Monday session, which signal positive momentum in the scrips. The small and mid caps also faced the selling fury, with many of them having ended in deep reds by the end of the day.
The US-based traders for days have been reiterating that “cash is the king” should be the mantra of the investors, because the global equity markets are in definite bear grips, while there are no signs of an early end to the Russian invasion of Ukraine. The Bank Nifty in the first half of the trading session was strong, as Axis Bank extended its gains, which began on Monday, with the scrip touching Rs 795 during the day. The private bank is in the midst of the merger of the Indian operations of the Citi Bank, which used to have a huge client base of high net worth individuals. The investors are hoping that the Axis Bank would finally come in the big league which is dominated by the likes of HDFC Bank, ICICI Bank and Kotak Mahindra Bank.
Dow Jones, however, was trading high with a gain of about one per cent in the early hours of the trade.
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