NEW DELHI: Domestic equity market extended losing streak for the eighth straight session with the BSE benchmark Sensex skidding below the 59,000 level on Tuesday. Investors have lost Rs 10.6 lakh crore since February 16 as the market capitalisation of BSE-listed companies reduced to Rs 257.7 lakh crore, according to provisional exchange data.
The 30-share index closed the Tuesday session at 58,962, down 326 points from the previous session’s closing. It has fallen 2,357 points or about 4% below its 16th February close of 61,319. The NSE Nifty50, on the other hand, closed 89 points lower at 17,304, and fell below its 200-DMA (Daily Moving Average) which stands at 17,384 – a key technical indicator on the charts. As per the market experts, global investors’ interest in the domestic equity market is weakening due slowdown of the economy amidst rising inflation and fear of more interest rate hikes to curb the same.
Indian GDP growth slowed to 4.4% in the October-December quarter of the current fiscal on account of weak demand and high inflation, showed government data on Tuesday. The US Federal Reserve, along with other central banks, have already hinted at more future rate hikes to bring down consumer inflation.
Shrikant Chouhan, head of equity research (Retail), Kotak Securities, said, “Weak sentiment continued to prevail as traders wary of current headwinds unwounded their position in commodity stocks such as metals and oil & gas. The market is already in an oversold position, but India’s high valuation compared to other markets seems to have caught up with the investors who are cutting their long positions.”
According to Vinod Nair, head of research at Geojit Financial Services, funds are being diverted to safe assets, and corporate earnings growth is dropping, affecting the performance of the stock market and demanding downgrade in valuation. The double whammy for India is that it is expensive compared to other emerging markets, resulting in underperformance among the global market, added Nair.
On the sectoral front, most sectors traded under pressure on Tuesday. The BSE Metal index shed 2.4%, the Oil & Gas and Energy indices dropped 1.4% each, and the Healthcare index fell 1%.