MUMBAI: Markets have corrected sharply on concerns about a halt in
quantitative easing in the US, which spooked investors. China's flash HSBC Purchasing Managers' Index for May, which fell to 49.6, for the first since October also led to a global sell-off.
Reacting to the meltdown in global equities, Finance Minister P Chidambaram said that the US Federal Reserve Chairman's statement has been misunderstood by the market. He said that foreign inflows into India in May have been copious and there is no need for investors to be nervous.
According to him, WPI inflation has come down below 5 per cent and investors should look forward to next quarter with greater confidence.
According to analysts, the current correction in Indian markets is on account of profit booking after the recent sharp rally and bearish sentiment in global markets. Fundamentally, there is no strong reason why the investors would exit the Indian equities at a time when the interest rates are expected to go down. They don't expect heavy outflows from the FIIs but some moderation in inflows is not ruled out if the US markets continue to move higher.
"This fall is like a blessing as we feel the Nifty will bottom out by roughly correcting 1-1.5 per cent and then stage a rally all the way to 6,400-6,500 in next 5 - 6 months. Best sectors to go long at the time of recovery would be banks, metals, capital goods and cement," said Manoj Muralidharan, AVP- Derivatives, IIFL PReMIA.
At 01:40 p.m., the S&P BSE Sensex was at 19,753.12, down 309.12 points or 1.54 per cent. It touched an intraday low of 19,697.44 and a high of 20,027.56.
The S&P BSE Midcap Index was down 1.85 per cent and the S&P BSE Smallcap Index fell 1.90 per cent.
Reacting to the meltdown in global equities, Finance Minister P Chidambaram said that the US Federal Reserve Chairman's statement has been misunderstood by the market. He said that foreign inflows into India in May have been copious and there is no need for investors to be nervous.
According to him, WPI inflation has come down below 5 per cent and investors should look forward to next quarter with greater confidence.
According to analysts, the current correction in Indian markets is on account of profit booking after the recent sharp rally and bearish sentiment in global markets. Fundamentally, there is no strong reason why the investors would exit the Indian equities at a time when the interest rates are expected to go down. They don't expect heavy outflows from the FIIs but some moderation in inflows is not ruled out if the US markets continue to move higher.
"This fall is like a blessing as we feel the Nifty will bottom out by roughly correcting 1-1.5 per cent and then stage a rally all the way to 6,400-6,500 in next 5 - 6 months. Best sectors to go long at the time of recovery would be banks, metals, capital goods and cement," said Manoj Muralidharan, AVP- Derivatives, IIFL PReMIA.
At 01:40 p.m., the S&P BSE Sensex was at 19,753.12, down 309.12 points or 1.54 per cent. It touched an intraday low of 19,697.44 and a high of 20,027.56.
The S&P BSE Midcap Index was down 1.85 per cent and the S&P BSE Smallcap Index fell 1.90 per cent.
Leave a Reply
Note: only a member of this blog may post a comment.