The Indian benchmark indices declined 1.4% on Monday touching their lowest level since November. The BSE benchmark Sensex was down 304.59 points at 20,209.26 points, while NSE’s Nifty was down 87.70 points at 6,001.80 points as Street reacted to lower growth estimates for FY13.
Experts feel markets fell as the recent set of data indicators have not been encouraging. “The growth estimate for FY13 has been revised to 4.5% from 5%. Foreign institutional investors (FIIs) turned net sellers in January with US Fed further cutting its stimulus package. Meanwhile, government has hiked the diesel prices,” said Alex Mathews, head (research), Geojit BNP Paribas Financial Services.
Among sectoral indices, BSE Metal (-3.06%) was the top loser. BSE Realty (-2.09%) and BSE Auto (1.88%) were among other losers. Demand concerns weighed over metal stocks in the backdrop of poor China PMI data. Hindalco (-5.61%), Tata Steel (-3.93%) and Tata Motors (-3.79%) were the major losers on Sensex. Auto stocks declined owing to weak January sales data.
While India’s manufacturing PMI jumped to 51.4 on Monday, experts feel sustained recovery will not be seen in near-term. “Activity in the manufacturing sector picked up in January on the back of higher output and strong order flows. Despite the slight pickup, growth remains subdued and a sustained recovery is not likely to materialise near term,” HSBC said in a research report.
Among Asian indices, Nikkei (-1.98%), Kospi(-1.09%) and Jakarta Composite (0.74%) were in the red. FIIs have net sold $23.91 million worth of Indian equities in current calendar year as US Fed moved to cut its bond-buying by another $10 billion last week. On Friday, the Dow Jones Industrial Average was down 0.94%, while the Nasdaq Composite was down 0.47%.