Mumbai: The markets plunged sharply on Thursday to close at their lowest level in the last eight months amidst persistent selling by foreign portfolio investors (FPIs). The sharp fall in the market wiped out Rs1.64 lakh crores of investors wealth in a single day. Market participants said that global exchange traded funds (ETFs) are behind the current round of selling in the Indian market as they are now shifting their focus towards markets like China seeking higher returns.
The sentiment also remained highly cautious ahead of the release of April IIP data and consumer price inflation numbers for the month of May. On Thursday, the markets failed to sustain the previous days winning momentum with the 50-share NSE Nifty slipping below the psychological 8,000 level mark to end the day at 7,965.35. The Sensex slumped 469.52 points or 1.75 per cent to end the trading session at 26,370.98.
The reports about deficient monsoon, dismal corporate earnings growth and the lesser chances of further interest rate cut in the coming days have also led to a subdued sentiments in the domestic market.“The biggest problem is the continuous selling by global exchange traded funds, some of whom are shifting money to China to invest in initial public offer,” said Deven Choksey, the managing director of K.R. Choksey Securities.
According to Mr Choksey, high level of speculative trading in the equity derivative market is also making the Indian markets very vulnerable. “Unless fresh buying in the cash market do not pick up momentum, the markets will remain under pressure in the coming days,” he added. According to the provisional data from the stock exchanges, foreign portfolio investors (FPIs) sold shares worth Rs 622.89 crore.
The major losers in today’s fall include Tata Power and Tata Motors, which fell 4.88 per cent and 3.61 per cent respectively. The broader market also remained weak with 1,896 stocks traded on the Bombay Stock Exchange (BSE) closing the day deep in the red as compared to 739 stocks that advanced.
