The BSE Sensex fell further on Thursday from early losses, while the broader NSE Nifty slid below the crucial 8,000-level in a flurry of stocks sale. The NSE index, which fell below the 8,000 mark for the first time since November 25, was on track for a seventh straight session of declines, its longest losing streak in 1-1/2 years. The index last recorded a seven-day losing streak in June 2015, when the India Meteorological Department cut its forecast for monsoon rainfall for the year. Selling was witnessed across the spectrum in metal, financials, banks, capital goods, power, telecom, consumer durables, IT and teck sectors amid weak Asian stocks. We take a look at some of the reasons for this decline.
Indian shares, like their regional counterparts, have taken a hit due to the Federal Reserve’s hawkish U.S. interest rate forecast last week that led to foreign selling in emerging markets.
Heavy FII outflows ahead of key US and ECB economic data later today, coupled with mute sentiment ahead of holidays, bumped the trading momentum. In India, foreign institutional investors have sold a net $250.28 million in shares this month as of December 20.
You May Also Want To Watch:
Overseas, Asian markets suffered modest losses after an overnight lacklustre performance on Wall Street, with investors looking at US economic data later in the day for potential catalysts even as markets started winding down ahead of the holidays. US stocks closed modestly lower yesterday as the market traded in a relatively tight range amid thinning volumes ahead of the December holidays.
Country’s cash crunch continued to weigh on corporate earnings expectations for the December quarter. Analysts said investors were booking profits due to a lack of a clear domestic triggers and persisting worries about the impact from a ban on higher value banknotes on the economy and corporate profits. “There is no clarity in the expectations of earnings routes for investors,” said Saurabh Jain, assistant vice-president of research at SMC Global Securities. “Due to demonetization, earnings for the December quarter is expected to be tepid, and there are also expectations that the impact could be carried into the next fiscal year.”
(With inputs from Agencies)