Sensex falls into correction as global outflow, muted earnings cloud sentiment
Sensex falls into correction as global outflow, muted earnings cloud sentiment
Blog Article
Nov 18 - The benchmark Sensex of India fell into correction territory on Monday as concerns over foreign outflows and weak corporate earnings remained, with information technology and energy stocks among the biggest losers.
The 30-stock BSE Sensex tracked the Nifty and small- and mid-cap indexes, which had entered correction on Nov.13.
The Sensex lost 0.31% on the day to settle at 77,339.01 points -- closing down 10.05% from a record high hit on Sept. 27. The Nifty declined 0.34%, dropped for the seventh consecutive session, marking its longest losing streak in over two years.
Nifty's relative strength index slipped below 30, indicating the benchmark may be in 'oversold' territory.
The correction has been the steepest in four years post-(COVID-19) pandemic, with price declining over 10% from peak levels without any significant interim bounce and hence while we have indications of an oversold status, caution still prevails amongst investors," Sameet Chavan, head of research at Angel One said.
Lackluster corporate earnings and about $15 billion of foreign outflows in the 34 sessions since record peaks on Sept. 27 have weighed on Indian shares, too.
IT companies that drew a bulk of their top line from the U.S. lost 2.32 per cent on Monday after the Federal Reserve Chair Jerome Powell said the pace for rate cuts is likely to be slower, at least for now, as the economy continues to expand and inflation hovers above target level.
The emergence of yield in the U.S. makes emerging markets — India among them — less attractive to foreign investors.
Indian IT stocks had risen around 5 per cent in the past two weeks on hopes that incoming U.S. President Donald Trump's administration would do no harm to their businesses through adverse policies.
Gas distributors Indraprastha Gas and Mahanagar Gas were the top losers on the Nifty though, down about 20% and 14%, respectively, each after a government announcement cutting allocation of gas for regulated prices.
Meanwhile, the metal index climbed 1.9% after China announced its cancellation of export tax rebates lifting global aluminium prices.
Shares of two-wheeler major Hero MotoCorp closed 2.8% higher after the firm reported a quarterly profit that beat forecasts, thanks to strong sales of mid-range motorcycles.
Author :- ApnaNews
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