Stock Market: Retail panic sinks bourses; signs of IT de-coupling

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By S Jha

New Delhi, February 20: On a day the global markets were mostly flat to positive, the Indian equity market once more tanked without the trigger of the foreign fund houses selling in the cash segment heavily. The first day of the trading after the ruling Bharatiya Janata Party (BJP) went hammer and tongue George Soros for conspiring against India, the equity market tanked on the back of the relentless selling by the retail investors.

Sensex closed the day with a loss of 311 points. Nifty was lower by 99 points. Bank Nifty dived 430 points. The foreign institutional investors (FIIs) accounted for a net sell in the cash segment of Rs 159 crores. The domestic institutional investors bought a net of Rs 86 crores. In Asia, Shanghai was higher by over two per cent. This was against the claims of in some quarters that the China reopening theme is over, for there appears more appetite for the foreign investors to take advantage of the valuation of the Chinese stocks.

Adani Group of companies remained under pressure during the day. With Congress hitting the street on the plank of the bashing of the Adani stocks and the Supreme Court too in the process of forming a committee, the equity market is seen to be gaining negative views among the people for allegedly being an arena of manipulation and the regulators not yet being strong enough to command corporate governance from the listed companies. This negative perception of the retail investors may take off the shield which had been saving the equity market even while the FIIs heavily sold India in the last 15 months.

The US is widely known to be a recession resilient economy. Wars in several parts of the world keep the engines of the US economy whirring. This insulates the US from the wrath of the slowdown, which has spread over Europe. This also brings cheer to the Indian IT firms, who mostly cater to the US market.

The Pune-based Persistent Systems has not looked back ever since announcing the third quarter result. The IT firm is giving numbers which seems unmatched in the industry. The investors have richly rewarded the scrip, as it ran from Rs 3800 level when the result was announced to almost touch Rs 5100 on Monday. Ashok Soota founded Happiest Minds also showed signs of waking after a deep slumber, as the scrip rose sharply, gaining almost seven per cent to close above Rs 900. Tech Mahindra remained bullish. Several small and mdcap IT stocks were trending on Monday.