Mumbai. The domestic stock market fell to a three-month low on Monday due to heavy selling in the shares of Reliance Industries and banks amid withdrawal of foreign funds. Sensex fell by about 942 points, while Nifty slipped by 309 points and closed below 24,000 points.
According to analysts, uncertainty related to the US presidential election and expectations of new stimulus measures to accelerate growth in China increased the selling in Indian markets. BSE’s 30-share index Sensex fell 941.88 points or 1.18 percent to close at 78,782.24, which is the lowest closing level since August 6. At one time during trading it had fallen by 1,491.52 points to 78,232.60 points. However, this decline was curbed a bit due to buying at lower levels in the last trading hour.
The standard index Nifty of National Stock Exchange (NSE) also fell by 309 points or 1.27 percent and closed at 23,995.35 points. In this way Nifty fell below 24,000 points. Among the Sensex companies, Adani Ports, Reliance Industries, Sun Pharma, Bajaj Finserv, NTPC, Tata Motors, Axis Bank and Titan were major losers. On the other hand, shares of Mahindra & Mahindra, Tech Mahindra, State Bank of India (SBI), HCL Technologies, Infosys and IndusInd Bank were in profit.
Vinod Nair, head of research at Geojit Financial Services, said, “As per estimates, India is underperforming other markets due to excessive valuations. “The weak results of the second quarter have accelerated the selling and affected investor sentiment.” Nair said that the market is likely to remain volatile in the near term as all eyes are now on the results of the US presidential election to be held on November 5. Apart from this, the market will also keep an eye on the policy steps of the Bank of England.
In the broader market, the BSE Smallcap index slipped 1.65 percent while the Midcap index declined 1.31 percent. Amidst this all-round selling, indices of all segments of the market closed with a decline. The realty segment witnessed the maximum decline of three percent, while the oil and gas segment witnessed a decline of 2.54 percent, the energy segment witnessed a decline of 2.51 percent and the telecom segment witnessed a decline of 2.11 percent.
Ajit Mishra, Senior Vice President, Religare Broking Limited, said, “The beginning of the trading week was negative. “Continued withdrawal of foreign funds along with cautious approach towards US elections affected the sentiment.” According to stock market data, foreign institutional investors (FIIs) made a net sale of shares worth Rs 211.93 crore on Friday.
Foreign investors have withdrawn Rs 94,000 crore (about 11.2 billion dollars) in the month of October, which is the highest withdrawal in any month so far. This happened due to the high valuation of the domestic stock market and attractive valuation of Chinese stocks.
An important meeting of a parliamentary committee of China is going to be held this week. There is speculation that the government may approve big spending initiatives to boost the economy in this meeting.
In Asian markets, South Korea’s Kospi, China’s Shanghai Composite and Hong Kong’s Hang Seng closed with gains. Most of the markets in Europe were trading with gains in the afternoon session. On Friday, American markets closed in positive territory.
Meanwhile, global oil benchmark Brent crude rose 2.57 percent to $74.98 per barrel. BSE and NSE had organized a special one-hour ‘Muhurat trading’ session on November 1 on the occasion of Diwali. During this period, Sensex increased by 335.06 points and closed at 79,724.12 points and Nifty increased by 99 points and closed at 24,304.35 points.