Investors were concerned over relentless foreign outflows seen in the last six sessions amid cuts in India equity rating by many foreign brokerages citing expensive valuations vis-a-vis other emerging markets.
Cues from Asian markets were weak, with Japanese September factory output falling 5.4 per cent month-on-month. US GDP growth also slowed to 2 per cent in September quarter, overnight data suggested. A rise in Covid cases in some of the developed countries including China, and a mixed set of quarterly earnings at home added to the weak sentiment.
At 9.24 am, the BSE Sensex was trading 722 points, or 1.20 per cent, lower at 59,262.23. The Nifty50 fell 200.45 points, or 1.12 per cent, to 17,656.80.
“When smart money selling turns aggressive, retail exuberance would be overwhelmed. This is happening now. Investors need not rush in to buy now; the ‘buy on dips’ strategy, which worked well since April last year, may not work when FIIs are selling massively. So investors may wait and watch the trend before taking decisions. However, switching from expensive stocks in the broader market to high quality large-cap growth stocks may be a good idea,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
