Market blues continue as stocks tank 770 points

MUMBAI:  September hasn’t been a kind month, at least for a while as far as markets are concerned. Most of the current troubles started surfacing after the default of IL&FS group last September and the uptrends in benchmark indices have been more deceptive as mid-caps and small caps continued to bleed.

September 2019 has begun with a shocker of gross domestic product (GDP) number, a hurried response from the government and a global trade war to contend with.

The first trading day of the month saw Sensex tanking 2 per cent or 770 points to close at 36,563 and Nifty down 225 points to 10,797.90.

Investor confidence is low and measures announced by the government over the last two weeks are also not seen as an immediate economic stimulus that can energise growth. Tuesday’s fall has been across the board, and only two Sensex stocks seen in green were Tech Mahindra, and HCL Tech.

“Whatever impact, it has already happened, one more day or two. Outlook for this month should be slightly positive, for we have had three months of consecutive decline, if we take derivatives for the last three series. Five consecutive Septembers have also been bad. What we can say is by the end of October we should be through with this kind of news. We should be on our way back to recovery,” said VK Sharma, head, private client group, HDFC Securities. 

The GDP numbers are bad, but what is positive is the ability to provide monetary stimulus with low inflation, said VK Vijayakumar chief investment strategist at Geojit Financial Services. 

“The Indian economy responds to monetary stimulus since there is lot of pent up demand in the economy... Nifty is likely to get support at 10,600 levels. Value buying is certain to emerge at those levels. Market is likely to consolidate before it moves up,” he added.