Stock Market: Signs emerge of Indian indices de-linking from global peers

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By S Jha

New Delhi, January 12: Indian stock markets remained in the grip of bears, with relentless institutional selling the indices lower. Now, there are signs that the Indian stock markets are de-linking from the global peers by sliding to lover levels.

Thursday being the day of weekly expiry, the indices covered up most of the losses in the last hour in the line with the trends seen for weeks which are indicative of the settlement actions. During the day, Nifty broke the low of last month of 17774. The market action in the Indian indices – Sensex, Nifty and Bank Nifty – were sharply in contrast to their Asian peers, while the US markets had firmly closed in the green.

The European equity markets on Thursday scaled their peaks, chasing firm positive direction amid anticipation that inflation in some of the countries in Europe has peaked. The US markets for a couple of days have been trading firm, while the Indian indices have remained laggards.

The IIP number for the month of November came in off-trading hour, surprising the street with 7.1 per cent growth while the market participants had been expecting a modest 2.2 per cent growth against negative growth of 4.5 per cent in the month of October. The inflation number also came in off-market hours, with numbers slightly coming down.

After TCS, Infosys and HCL Technology announced their quarterly results, with both the IT giants reporting robust numbers, beating the street expectations. Infosys was more bullish than HCL Technology in giving guidance for the next quarter.

On Thursday, Reliance Industries, ICICI bank, Axis Bank, Hindalco and several others were knocked down by the bears, as they trended down. HCL Technology led the IT pack in ducking the bearish trend in the markets.

The visible de-linking of the Indian stock markets clearly appear to be on account of the foreign institutional investors dumping the equities. The FIIs have been net sellers on all days this month, growing in intensity with each passing day. Their domestic counterparts are not able to match even while the DIIs continue to pump cash in the equity markets.