Mumbai: The equity markets slumped sharply on Monday after a survey showed that the growth in India’s manufacturing sector slowed down in August amidst weak demand.
Extending its fall for the fourth consecutive session, the Sensex lost 332.55 points or 0.86 per cent to end the day at 38,312.52 while the Nifty ended the session at 11,582.35, down 98.15 points or 0.84 per cent.
The markets witnessed heavy profit booking despite India’s GDP growth accelerating to 8.2 per cent during the April – June period.
“We maintain our FY19 GDP growth estimate at 7.3 per cent, up from 6.7 per cent in FY18, on the back of robust government spending, rural demand and cyclical recovery in the industrial sector. However, we expect growth to moderate in second half of FY19 amid elevated crude oil prices, sharp rupee weakness and tighter financial market conditions amid adverse global conditions. If the recent weakness in the rupee was to continue, we do not rule out an October rate hike even as the next few inflation readings will remain comfortably around 4 per cent,” Kotak Institutional Equities said in a note to its clients.
According to the provisional data, foreign portfolio investors (FPIs) sold shares worth Rs 21 crore while the domestic institutional investors (DII) offloaded equities to the tune of Rs 542.12 crore.
“In general scenario, the broader market falling towards the fag end of the day with such a velocity is considered to be an alarming sign. If we analyse the chart structure of sectoral indices (including Midcap 50), we can clearly see this correction as a profit-booking move. For us, this market still remains to be a ‘buy on dips’ kind of market and hence, without hesitating much, we would use this decline to buy into with slightly positional perspective,” said Sameet Chavan, chief technical analyst at Angel Broking.