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Bloodbath in D-Street Today.
Benchmark stock market indices opened Monday’s trading session on a negative note on Monday morning
Benchmark stock market indices opened Monday’s trading session on a negative note, dragged by declines in information technology and financial stocks.
The BSE Sensex was down 706 points, or 0.83 per cent, trading at 84,865.79, while the Nifty50 dropped 206 points, or 0.79 per cent, to 25,973.15 at around 9:50 am.
Why Are Markets Falling?
The share market also turned hesitant on Monday due to the conflict in the Middle East. Continued Israeli attacks in Lebanon have increased geopolitical uncertainty.
Meanwhile, the week is packed with major U.S. economic data including a payrolls report that could decide whether the Federal Reserve delivers another outsized rate cut in November.
Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said, “Market is likely to move into a consolidation phase in the near-term.”
“One significant factor that is influencing foreign portfolios is the outperformance of the Chinese stocks which is reflected in the massive surge in the Hang Seng index by around 18 per cent in September. This surge has been triggered by hopes of revival in the Chinese economy in response to the monetary and fiscal stimulus announced by the Chinese authorities,” he explained.
He also noted that the cheap valuations of Chinese stocks are keeping the momentum intact.n “This can prove to be a tactical trade which can sustain for some more time. This means FIIs may continue to sell in India and move some more money to better performing markets,” Vijayakumar added.
However, he clarified that FII selling is unlikely to impact the Indian market significantly since the massive domestic money can easily absorb whatever the FIIs are selling. “Investors can use dips to buy quality largecaps which are fairly valued.”
