Dealing a body blow to decoupling theorists in India, domestic equity bourses tumbled on Monday following weak global cues, with the broader 50-share Nifty of the NSE posting its steepest fall ever and the 30-share Sensex of the BSE registering its second-steepest drop. The Nifty fell by 270.7 points?or 4.48%?to close the day at 5,777 points. The benchmark Sensex closed the day at 19,261.35 points, shedding 769.48 points, or 3.84%.
The Sensex witnessed an intra-day loss of 853.64 points, most of which came in the last hour of trading when selling intensified in frontline counters. On Monday, global markets succumbed to selling pressure over concerns that accelerating US inflation would slow the pace of interest rate cuts by the Fed, prompting global institutional investors to book profits in emerging markets.
As a result, Asian markets traded deep in the red with the Hang Seng losing 967.06 points, or 3.51%, at 26,596.58 points, while the Nikkei-225 lost 264.72 points, or 1.71%, to close at 15,249.79 points. The Shanghai Composite was down 126.51 points, or 2.53%, the Taiwan Weighted lost 287.23 points, or 3.54%, while the Straits Times was down 112.82 points, or 3.25%.
FIIs were seen following the same strategy on the domestic markets, too. According to provisional data released by stock exchanges, FIIs were net sellers by a hefty Rs 2,151 crore on Monday. Deven Choksey, MD, KR Choksey Securities, said, ?The major issue today was the speed with which the market came down, triggering stop-losses, accentuating the fall further. Strong advance tax figures will help the market stabilise.?
Meanwhile, Standard & Poor?s (S&P), the leading global rating agency, said in its global stock market review for November that during the month, emerging markets gave returns of negative 6.18% and performed worse than developed markets at negative 4.39%. The report also says emerging markets gave a return of 15.70% over the last three months, compared to the developed markets? meagre yield of 3.36% over the same period.