Markets recover after plunge

As expected, the equity markets witnessed a roller-coaster ride on Monday with the Sensex and Nifty plunging sharply at the opening bell after a dismal showing by the BJP-led NDA in the recently concluded Bihar state assembly election raised concerns about the pace of policy reforms in the coming months.

However, the markets soon regained their momentum and recouped most of their losses as fresh buying emerged at lower levels in large cap stocks.

After falling by over 600 points in the intra-day trade, the Sensex reclaimed the psychological 26,000 level mark to end the day at 26,121.40, down 143.84 points or 0.55 per cent from its previous session close.

The NSE Nifty slumped 39.10 points or 0.49 per cent to end the day at 7,915.20.

Rating agency India Ratings on Monday said that the defeat of the BJP led alliance in Bihar has not changed the medium term outlook on India.

“However, it does open up a debate on whether reforms will be able to accelerate in wake of an ongoing global slowdown. The government has been keen to push some key legislation such as the unified tax regime and landacquisition bill. While it is too early to say whether the government will become more populist than reformist, this defeat is sentiment-negative as consensus building might remain tough in the upper house of the Parliament,” it said.

As per data by the stock exchanges, FPIs sold shares worth `861.06 crore while the domestic institutional investors picked up shares worth `621.18 crore. “We expect net profits of the Nifty-50 Index for FY2016 and FY2017 to grow 8.3 per cent and 20.1 per cent, the data said.