Indian equity markets are under pressure on the back of expected FII selling. Analysts believe that the FIIs are winding up their positions in the market due to year-end and are not willing to carry those positions even in the cash markets.
The Nifty 50 dropped 300 pints or 1.2% to 24,323.60 from the day’s high while the Sensex slipped 973.67 points or 1.2% to the day’s low of 80,639.97.
Ajit Mishra, Senior Vice President of Research at Religare Broking said that it is largely based on FII selling due to year-end. The selling pressure was seen in the large-cap stocks. However, some stocks saw a sharp recovery, which could be due to DIIs buying. Also, the reason he stated behind FII selling is the good returns they’re fetching in the US markets. Further, the policy rate cut is also expected, which may boost US markets.
Apart from that, the select IT counters saw profit-taking ahead of Fed policy.
The broader markets, Nifty Midcap 100 showed some strength during the early trade hours but later gave up to trade 450 points or 0.8% lower at 59,204.30. The Nifty Bank dropped 780 points from the day’s high to trade at 52,735.95.
The index heavyweights like HDFC Bank, Reliance Industries, Bharti Airtel, ICICI Bank, and TCS were the major contributors to the fall of Nifty 50. While Shriram Finance which lost as much as 4.8% along with Bharti Airtel, Grasim Industries, JSW Steel, and Hero MotoCorp were the significant losers in the Nifty 50.
“The Nifty declined sharply after forming a bullish harami pattern on the daily timeframe yesterday,” Rupak De, Senior Technical Analyst at LKP Securities.
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