BS analyses markets under pressure
ON FRIDAY, the Indian markets came under pressure amid a sell-off in global equities with investors increasingly worried about escalating trade tensions between the US and China.
The BSE S&P Sensex fell 410 points to 32,597, its lowest close since December 5, as seen in chart 1. The Sensex is trading at 17.3 times its estimated 12-month forward earnings compared to the 10-year average of 16 times. The Nifty fell below the 10,000 level for the first time this year. But smalland mid-cap stocks continue to outperform large-cap ones as seen in chart 2. Public sector bank stocks continued to underperform their private sector counterparts as worries over NPAs and scams mount (chart 3). And though demonetisation had dealt a severe blow to the fortunes of the real estate sector and concerns over excess supply continue to linger, the NSE realty index has surged over the past year as seen in chart 4. Sectors such as IT continue to map the broader market, while others like pharma have underperformed the broader market (chart 5). On the other hand, the commodity index is up 18.5 per cent over the past year. And while sentiment has turned negative, foreign portfolio investors have poured in roughly ~105 billion in Indian equities over the January-March period so far as seen in chart 7.
In the F&O segment, trading volumes of Nifty futures on the Singapore Stock Exchange (SGX) have plummeted by around 50 per cent from 108,871 in February to 54,004 in March since the NSE and BSE ended their data-sharing agreements.