Journalists from Gulf Countries visited BSE
By S Jha
New Delhi, January 23: Sensex and Bank Nifty dived by more than 1000 points on Tuesday after the indices opened following a Monday holiday. Nifty slumped by 333 points to close at 21238, losing almost 1000 points in a short span of time.
The market participants are speculating on reasons for the markets to crash heavily on Tuesday. The selloff in the PSU stocks, particularly the railway scrips, turned out to be brutal. Some of the frontline railway stocks shaved off more than 10 per cent, while losing much more from the day’s high as they had extended the gains in the morning session.
The usual culprit appears to be the foreign portfolio investors (FPIs) who have been selling the Asian equity markets heavily this month. The FPIs, as per the market participants, are selling Asia after it dawned upon them that the anticipated rate cuts would not happen so soon. The voices emerging from the Federal Bank have come as dampener to the equity market sentiments.
The foreign institutional investors once more sold a net of Rs 3115 crores on Tuesday. They had been on a selling spree since the announcement of the quarterly result by the HDFC Bank, accounting for two days of Rs 10,000 crores plus selloffs in the equity markets. The brief pause of Friday and Saturday appears to have again given to the heavy selling on the parts of the FPIs. The domestic institutional investors who generally buy into a selloff are not able to match the intensity of the selling by the FPIs. The DIIs bought just a net of Rs 214 crores on Tuesday.
The market participants have refreshed their memories of the tide of January which as per historical trends has been seen to be negative for the equity market. There also appears claims that the brutal selloff in January doesn’t augur well for the year as well. India will go to the Lok Sabha elections in another three months, and the market participants are wondering the scale and the extent of the withdrawal by the FPIs.
Barring the health sector, all other segments went into the claws of the bears on Tuesday. The realty sector bore the maximum brunt, falling by 5.46 per cent in a day. The banking sector was heavily punished as the likes of the State Bank of India, IDFC, Punjab and National Bank, Axis Bank, IndusInd Bank, and others were severally punished for their poor set of numbers in the quarterly results.
(Disclaimer: This article makes no suggestion for buy or sell of any stock; one must consult a SEBI-registered advisor before making any investment decisions)
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