FII slowdown weighs as indices now among worst performers
In just a little over two months, the Indian benchmark indices have moved out of the list of the best performing markets globally to feature among the worst performers. Experts attribute this shift to macro-economic fundamental concerns and inconsistent policy decisions that have even led to a slowdown in foreign inflows — the prime drivers of the rally last year.
In 2013, the benchmark Nifty has lost 3.50%, which is only better than Brazil's Bovespa that is down 6.7% in the current calendar year. The BSE Sensex has performed only a tad better than the Nifty, restricting its fall to 2.8%. On Monday, both Sensex and Nifty lost 0.21% and 0.37%, respectively, to touch near three-month lows. The Sensex settled at 18,877.96 — a loss of 40.56 points, or 0.21% compared to Friday's level. The broad-based National Stock Exchange index Nifty lost 21.20 points, or 0.37%, to close at 5,698.50.
Interestingly, most of the other Asian indices, though experiencing weakness, have managed to gain marginal ground since the beginning of the year. The Asian weakness also comes at a time when most equity indices in Europe and the US are touching multi-year highs. For instance, Dow Jones is trading at more than five year highs.
According to Abhay Laijawala, MD and head (research), Deutsche Equities, “performance of Indian markets would be largely determined by policy action.” While he pegs the year-end Sensex target at 22,500, he adds
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