Markets continue to fall for 5th straight day

THE BSE SENSEX SLIPPED 535.57 POINTS OR 1.13% TO CLOSE AT 46,874.36, WHILE NIFTY FELL 149.95 POINTS OR 1.07% TO 13,817.55

MUMBAI: Indian stocks fell further on Thursday amid caution ahead of the Union budget and a sell-off in global markets, despite the US Federal Reserve maintaining its accommodative monetary policy.

The BSE Sensex slipped 535.57 points or 1.13% to close at 46,874.36, while the Nifty fell 149.95 points or 1.07% to 13,817.55.

Nearly ₹10 lakh crore of investors’ notional wealth has been eroded in the past five consecutive trading sessions, during which the Sensex lost 2,917.76 points or 5.86%. Tracking the muted sentiment, the market capitalisation of Bse-listed companies plunged by ₹9.57 lakh crore to ₹188.14 lakh crore during these five days.

“Three days of continuous selling and sharp correction in the US markets have combined to create a risk-off mode. FII selling has emboldened the bears to go short in this over-valued market. Also, there are apprehensions of some new taxes in the budget that may not be to the market’s liking,” said V.K. Vijayakumar, chief investment strategist at Geojit Financial Services.

Asian shares slid on Thursday, while delays in coronavirus vaccines provided an excuse to book profits. China’s Shanghai composite was down 1.91%, Hong Kong’s Hang Seng 2.55%, Japan’s Nikkei 1.53% and Topix index 1.14%, and South Korea’s Kospi 1.71%. The US Fed on

Wednesday left its key overnight interest rate near zero and made no change to its monthly bond purchases, pledging again to keep those economic pillars in place until there is a full rebound from the pandemic-triggered recession.

In a statement issued after its two-day meeting, US central bank policymakers flagged a worrying slowdown in the pace of economic recovery.

Global financial analysts said the US markets saw a sell-off as retail investors forced a massive squeeze on hedge funds that held short positions in stocks such as Gamestop.

In India, foreign institutional investors bought $3.09 billion in equities since the start of this calendar year, while domestic institutional investors sold ₹14,413.70 crore in stocks. However, FIIS have sold $166.65 million in the last three sessions, with an outflow of $92.44 million on Wednesday alone.

Despite the nervousness in the markets, analysts are optimistic that the Union budget will focus on driving economic revival and will be positive for the equities market.

Reuters story.

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