Sensex and Nifty fall by 143.84 and 39.10 points respectively
Sensex and Nifty fall by 143.84 and 39.10 points respectively
As expected, the equity markets witnessed a roller-coaster ride on Monday with the Sensex and Nifty plunging sharply at the opening bell after a dismal showing by the BJP-led National Democratic Alliance (NDA) in the recently concluded Bihar state assembly election raised concerns about the pace of policy reforms in the coming months.
However, the markets soon regained their momentum and recouped most of their losses as fresh buying emerged at lower levels in large cap stocks.
After falling by over 600 points in the intra-day trade, the Sensex reclaimed the psychological 26,000 level mark to end the day at 26,121.40, down 143.84 points or 0.55 per cent from its previous session close.
The NSE Nifty slumped 39.10 points or 0.49 per cent to end the day at 7,915.20.
Rating agency India Ratings on Monday said that the defeat of the BJP led alliance in Bihar has not changed the medium term outlook on India.
“However, it does open up a debate on whether reforms will be able to accelerate in wake of an ongoing global slowdown. The government has been keen to push some key legislation such as the unified tax regime and land-acquisition bill. While it is too early to say whether the government will become more populist than reformist, this defeat is sentiment-negative as consensus building might remain tough in the upper house of the Parliament,” it said.
According to the provisional data released by the stock exchanges, foreign portfolio investors (FPIs) sold shares worth Rs 861.06 crore while the domestic institutional investors picked up shares worth Rs 621.18 crore.
“Valuations appear reasonable but will become pricier as we expect further earnings cuts for our FY2016 and FY2017 estimates. We currently expect net profits of the Nifty-50 Index for FY2016 and FY2017 to grow 8.3 per cent and 20.1 per cent. We see downside risks to the market over the next 2-3 quarters until there is conclusive evidence of economic reforms and recovery and greater confidence in the street’s earnings estimates,” they said in a report.
