Business News
Continued decline: Indices lose 2.2% this week on poor show of govt banking stocks
The sentiment swing also manifested in institutional flows into equities in India with both foreign investors and domestic institutions selling and buying in two sessions each of the week, during the first four sessions for which data was available.
Equities in India on Friday lost value for the seventh time in eight sessions with benchmark indices closing in the red. The Sensex and Nifty ended the session down 0.15 per cent and 0.13 per cent, respectively, at 33,307 and 10,227 points.
Over the week, the indices gave up 2.2 per cent, leaving India the worst performing major market after Indonesia, which lost 2.3 per cent. The markets were driven down by the steep fall in prices of state sector banking stocks; the Nifty PSU Bank index plummeted 5.4 per cent during the week.
The nervousness around the future prospects of state-owned banks in the wake of the fraud at Punjab National Bank has shattered investor confidence in all but the largest few banks.
The sentiment swing also manifested in institutional flows into equities in India with both foreign investors and domestic institutions selling and buying in two sessions each of the week, during the first four sessions for which data was available. While foreign investors brought in a net $148 million, domestic institutions infused a net $30 million over the first four sessions of the week.
Institutional flows into equities were tepid; both foreign and local institutions were circumspect stepping in to buy only selectively. Mahesh Patil, co-chief investment officer at Aditya Birla Sun Life Asset Management Company, said the correction had not been very large and since even bull markets have seen corrections of excess of 10per cent, it would be too early to call an end to the fall.
“We can’t rule out further downside. But with stronger domestic outlook, I think with every correction, valuations will start looking attractive and market will find support,” Patil said.
He pointed out that there had been a fair bit of a fall in individual stocks, especially in mid- and small-caps, leaving them looking attractive.
On Friday, the markets opened higher on positive cues from Asia after news of talks between the US and North Korea were confirmed. However, they gave up the gains towards close on a weak opening in
European markets on lingering concerns over the implications of US hiking tariffs on imports. Global indices seesawed with his every comment on imposition of import tariffs. Trump had on Friday last week set the cat among the pigeons by stating that he was considering imposition of import tariffs to protect US industry.
