Sensex tanks 300 points: Here are the top factors dragging the market
, ETMarkets.com|
Updated: Sep 25, 2017, 10.47 AM IST
Equity benchmarks BSE Sensex and NSE Nifty slipped for the fifth straight session on Monday. At 10.25 am (IST), the 30-share Sensex was down 302 points, or 0.95 per cent, at 31,619 while NSE Nifty index breached the 9,950 mark and was trading 115 points, or 1.15 per cent, down at 9,849.
During the week ended September 22, Sensex shed 350 points to close at 31,922. Likewise, Nifty index shed 121 points to end the week at 9,964 from 10,085 on September 15.
Going by the buzz in Dalal Street, here are top five factors putting pressure on market sentiment.
Profit booking
Some profit booking at higher levels also depressed markets in Monday’s trade. According to HDFC Securities, it is better to be safe than sorry. “We asked traders to book profits and do not create long trading positions and that must have helped averting large losses,” the brokerage said.
Sustained FPI outflows
Foreign investors have remained in exit mode as they have pulled out nearly Rs 5,500 crore from stock markets so far this month due to geopolitical concerns and a tendency to take profit. Net outflow by foreign portfolio investors (FPIs) follows withdrawal of Rs 12,770 crore from equities in August. Prior to that, they had pumped in over Rs 62,000 crore in the past six months.
Fear of slower growth
Last week, OECD slashed India's growth forecast for this financial year to 6.7 per cent from 7.3 per cent estimated in June, citing transitory impact of GST rollout and demonetisation. In contrast, China's economy gets a 0.2 per cent lift from its earlier assessment to 6.8 per cent for 2017.
Global uncertainty increases
Threats and counter-threats have increased tension in the Korean Peninsula. That along with the US Fed’s hawkish monetary policy stance and the decision to begin its balance sheet reduction programme in October 2017 coincided with domestic challenges for Indian equities, which include fears of combined fiscal slippage due to the state farm loan waivers and uncertainty in achieving budget revenue targets. A sharp depreciation in the rupee over the past two weeks and spike in bond yields (14.1 bps in Sept’17), rise in current account deficit (2.4 per cent of GDP in Q1FY18 vs 0.1 per cent in Q1FY17), slowing GDP growth and stretched valuation are other factors which are also impacting domestic equity markets.
Weak global cues
Dow Jones Industrial Average index on the Wall Street closed 9.64 points, or 0.04 per cent, down at 22,349 in Friday’s trading session. Following the US markets, Asian peers Hang Seng and Shanghai were also trading lower by 1.04 per cent and 0.35 per cent, respectively, in morning trade.
During the week ended September 22, Sensex shed 350 points to close at 31,922. Likewise, Nifty index shed 121 points to end the week at 9,964 from 10,085 on September 15.
Going by the buzz in Dalal Street, here are top five factors putting pressure on market sentiment.
Profit booking
Some profit booking at higher levels also depressed markets in Monday’s trade. According to HDFC Securities, it is better to be safe than sorry. “We asked traders to book profits and do not create long trading positions and that must have helped averting large losses,” the brokerage said.
Sustained FPI outflows
Foreign investors have remained in exit mode as they have pulled out nearly Rs 5,500 crore from stock markets so far this month due to geopolitical concerns and a tendency to take profit. Net outflow by foreign portfolio investors (FPIs) follows withdrawal of Rs 12,770 crore from equities in August. Prior to that, they had pumped in over Rs 62,000 crore in the past six months.
Fear of slower growth
Last week, OECD slashed India's growth forecast for this financial year to 6.7 per cent from 7.3 per cent estimated in June, citing transitory impact of GST rollout and demonetisation. In contrast, China's economy gets a 0.2 per cent lift from its earlier assessment to 6.8 per cent for 2017.
Global uncertainty increases
Threats and counter-threats have increased tension in the Korean Peninsula. That along with the US Fed’s hawkish monetary policy stance and the decision to begin its balance sheet reduction programme in October 2017 coincided with domestic challenges for Indian equities, which include fears of combined fiscal slippage due to the state farm loan waivers and uncertainty in achieving budget revenue targets. A sharp depreciation in the rupee over the past two weeks and spike in bond yields (14.1 bps in Sept’17), rise in current account deficit (2.4 per cent of GDP in Q1FY18 vs 0.1 per cent in Q1FY17), slowing GDP growth and stretched valuation are other factors which are also impacting domestic equity markets.
Weak global cues
Dow Jones Industrial Average index on the Wall Street closed 9.64 points, or 0.04 per cent, down at 22,349 in Friday’s trading session. Following the US markets, Asian peers Hang Seng and Shanghai were also trading lower by 1.04 per cent and 0.35 per cent, respectively, in morning trade.
