The rupee weakened against the
as talk of a faster pace of bond tapering by the US Federal Reserve led to a global strengthening of the greenback. A continuation of the slide in digital payments giant ‘s shares also weighed on the market. The stock has lost 37% in two days following its listing after a record-setting initial public offering (IPO) earlier this month.
Ending down for the fourth straight day, Indian indices slumped the most among Asian markets.
The Sensex fell 1,170.12 points or 2% to close at 58,465.89 and the Nifty slipped 348.25 points or 2% to close at 17,416.55.
Out of 30 Sensex stocks, 27 ended in the red with losses being led by the Bajaj twins–Bajaj Finance and Bajaj Finserv–which fell 5.7% and 4.7%, respectively. Reliance was the third-biggest casualty on the index, losing over 4%. Foreign portfolio investors (FPIs) sold Indian shares worth a net ₹3,428.76 crore on Monday while domestic institutional investors (DIIs) bought equities worth ₹2,051.18 crore.
“There are US taper tantrum-related worries and disappointment over recent IPOs’ performance,” said Nilesh Shah, managing director, Kotak Mahindra Asset Management Co. “The market is catching up on valuation in segments where stocks have run up a lot.”
The announcement that the new farm laws will be repealed has also dented sentiment among investors.
6% down from October highs
“It is sentimentally negative as these are reforms that were good from a long-term perspective,” said Vinit Sambre, head of equities at DSP Investment Managers. “It won’t impact any sector as benefits from these laws were not built into estimates.”
Experts see fewer triggers for the market after the earnings season.
The relentless decline in indices is worrying investors after several global brokerages, including Morgan Stanley, Goldman Sachs and Nomura, downgraded their view on Indian equities. These have come after stock indices enjoyed a near vertical rally from Covid-19 market lows in March 2020.
With Monday’s fall, benchmark indices are down 6% from their highs in October. The Sensex scaled a record of 62,245.43 on October 19. The Nifty touched an all-time high of 18,603.45 on the same day.
Shah of Kotak AMC said he doesn’t think the market is past its peak.
“I don’t agree that we have seen the peak of the market for this year or the coming years,” he said. The market slump is a great opportunity to add to equities in the green zone where valuations are fair but not by a big margin, he said.
