Foreign institutional investors (FIIs) continued to pull out money from the Indian market on Thursday leading to benchmark indices falling for the second consecutive day. Higher interest rate in the US coupled with geopolitical tensions in the Middle East have kept their spirits muted for quite some time.
The Sensex closed 248 points, or 0.38% lower at 65,629.24, while Nifty 50 extended losses by 46 points, or 0.24% to close at 19,624.70. In the past couple of days, the Sensex has fallen 800 points while the Nifty-50 has slipped over 200 points.
“There is a bit of uncertainty at this point in time because of the war, which is why the markets are looking a bit subdued,” said Ashutosh Mishra, head, of research- Institutional Equities at Ashika Stock Broking.
The markets will be range-bound over the next 10-15 days despite good results, with oil and gas sectors as well as its dependent sectors such as power and metals continuing to face volatility in the near term, he added.
However, experts pointed out some optimism in the equity market given “global efforts to stabilise the conflict in West Asia which de-escalated the crude prices.”
Brent crude oil prices cooled off from Wednesday’s $91.50 per barrel to $90.19 per barrel, as of 4:50 p.m. on Thursday. Mishra pointed out that the market is still waiting for clarity to emerge regarding the geopolitical conflict in the Middle East.
The mid-cap and small-cap indices fell a little less. The BSE Midcap index closed 0.08% lower while the Smallcap index closed 0.07% higher. Sector-wise, S&P BSE Metal was the top laggard, with losses of about 0.95%, followed by S&P BSE Energy, which fell 0.56%. S&P BSE Oil & Gas was down 0.48%.
“The volatility in the markets will persist owing to higher US 10-year bond yields and the geopolitical tensions and its potential escalation,” said Siddharth Sedani, executive vice president- Equity Advisor and Sales at Anand Rathi
However, he believes that this correction is a short-term movement because of the strong domestic inflows into systematic investment plans every month.
