Top 5 Factors Worrying the Indian Market Now
BSE Sensex has lost 2% so far this month after a rally in March. Here’s what is keeping markets on the edge
timesinternet.in New Delhi: After a sharp doubledigit rally in March, the S&P BSE Sensex seems to have lost momentum and has lost close to 2% so far in April. Concerns over poor March quarter earnings, FII selling, uncertainty over monsoon as well as a drop in global growth rate and possible rate hike by the US Fed are some of the factors weighing on the domestic market. Experts feel this correction is short term and investors should look at buying on dips. ETMarkets.com collated a list of top five factors weighing on the market:
FIIs Turn Net Sellers Foreign institutional investors (FIIs), who pumped over ₹ 24,000 crore into Indian equities in March, turned net sellers, which could be a worrying sign. FIIs sold stocks worth close to ₹ 500 crore on Wednesday, while they dumped shares worth about ₹ 800 crore on Tuesday. For April, they have turned net sellers.
March Quarter Earnings India Inc’s earnings have disappointed so far in FY16 and the trend is unlikely to be different in the last quarter of the financial year. Most companies have suffered due to muted global demand, global growth and tight fiscal policy.
“We expect net income of the com- panies in the Kotak Institutional universe to remain flat on a yearon-year basis,” Kotak Institutional Equities said in a note.
Monsoon a Big worry A bad or even a below-average monsoon would leave a big dent on the market, feel experts. Monsoon accounts for 80% of the country’s total rainfall and contributes more than 50% of water requirement for farming. “Monsoon will be one of the important factors in determining market movement t hi s time around,” AK Prabhakar, head of research, IDBI Capital, told ET NOW.
Technical Setup Weak The Nifty50 is trading around its crucial support level and a breach of the 7,580 level on the downside could lead to a further correction in the market. “If Nifty50 breaches the 7,580 level, then further correction cannot be ruled out based on technical chart patter ns. That breach would open the window for a further correction towards next target of 6800 which could come by the end of May 2016 i t s el f , ” Prabhakar told ETMarkets.com.
Global Growth & Fed Hike The Fed minutes released on Wednesday showed that policymakers are divided on whether to raise rates in April. However, the consensus is that a Fed rate hike could come after June amid caution due to falling global economic growth. “We expect a couple of rate hikes beginning in September,” Geoffrey Dennis, UBS Investment Bank said in an interview with ET Now.