At the end of another nightmarish week, which sent the Sensex to 18,396 levels, it seems Indian equities wont find too many takers in the near term. An unfavourable macroeconomic environment and a lethargic government have forced investors to relook their options and the consensus view is that if FIIs havent really really taken too much money off the table they will soon. India has been the worst performing market in 2011 so far having underpeformed all its peers including China, Russia, Brazil, Korea and Taiwan.
The US economy is recovering faster than expected and that could impact foreign inflows coming into India, said Sashi Krishnan, CIO, Bajaj Allianz Life Insurance. Krishnan pointed out that foreign investors now expect the rupee to depreciate to Rs 47-48 levels, which will eat into their profits and therefore, they will start looking at other markets to invest in. The erosion in the market capitalisation since the start of the month has been Rs 7.5 lakh crore. Between November 5, 2010, when the Sensex hit a new peak of 21,005 and Friday, investors have lost close to Rs 12 lakh crore.
Indian indices shed more than one-and-a-half percentage points on Friday to hit a fresh four-and-a-half month low. This is the third weekly lossthe Sensex was down 3.2 % in the week to Fridayfor the indices in the past four weeks. On Friday, the BSE Sensex slipped 288 points or 1.54% to close at 18,395 while the broader Nifty of the National Stock Exchange (NSE) was down 92 points or 1.64% at 5512. Foreign institutional investors (FIIs) continued to offload shares this week as well, selling shares worth $0.17 billion, as per Sebi data. On Friday, FIIs were net sellers to the tune of Rs 706 crore, while domestic institutional investors (DIIs) bought shares worth Rs 81 crore. In the year-till-date, FIIs have sold shares worth $1.06 billion.
The mood among markets in Asia Pacific was somber as well, with most of the key benchmark equity indices in the region declining. Jakarta Composite, Hang Seng Index and Nikkei 225 lost the most, slipping 0.77%, 0.68% and 1.13%, respectively. Chinas Shanghai Composite bucked the trend by gaining 0.13%.
Of the 30 Sensex stocks, 22 ended the session in the red. The market breadth was very poor with nearly 80%, or 2,386, scrips coming off and only 17% scrips gaining. Every single sectoral index of the BSE ended in the red. Consumer Goods, Auto and Consumer Durables indices slipped by more than 3%, while the Realty index slid the most at 4.9%.
The NSE cash turnover on Friday was at Rs 15,048 crore, while the six monthly daily average is Rs 15,195 crore. Turnover in derivatives was Rs 1.24 lakh crore, a day after the expiry session. The six-month daily average also stands at Rs 1.24 lakh crore.