Market wipes out all of post-Fed gains in 2 sessions - mydigitalfc.com

Indian stock markets, which rose last week after the US Fed decision to delay scaling back its stimulus measures, fell on Monday with both the Reserve Bank of India (RBI) and Fed's future policy actions haunting local markets. Two consecutive falls on Monday as well as last Friday have nearly wiped out all the gains in the BSE Sensex during last week after RBI announced a policy rate hike on Friday. The fears over another possible rate hike by RBI added to the market woes on Monday leading to 362.75 points fall on Monday, adding to the 382.93 point slide on Friday. With the fears of US Fed withdrawing QE-3 anytime persisting as analysts weighed Fed speeches, the US markets fell sharply on Friday, and had an impact on the global market on Monday morning. Domestic markets fell on negative global cues and further rate hike fears by RBI, said analysts. The Sensex lost 363.75 points retreating below 20,000 level to close at 19,900.96. Last week, the index rose to 20,646.64 riding the euphoria over Fed's no-tapering decision. But domestic investors pulled out after RBI raised repo rates by 25 basis points to 7.50 per cent on last Friday. Asian markets also closed in the red with Japan's Nikkei down 0.16 per cent and Hong Kong's Hang Seng down 0.56 per cent while major European market traded in the red down by 0.5 per cent, also impacted by German Chancellor Angela Merkel third successive victory in the German elections. Amar Ambani, head of research at IIFL, said, "Considering deepening slowdown and heightened risks to growth, we do not envisage RBI to further hike repo rate in FY14." The fall in the market has been triggered by domestic institutional investors turning net sellers of equities in the last two sessions. Domestic institutions sold equities worth Rs 745.89 crore on Monday and Rs 790 crore on last Friday. Foreign institutional investors were net sellers of equities worth Rs 80.57 crore only and net buyers by Rs 977 crore on Friday. Vikram Dhawan, director, Equentis Capital – a UK-based investment analytic and advisory company, said, "With the latest Fed move, liquidity has been restored in the global markets. But in the local market, RBI's measures on Friday have sucked out liquidity. That is why domestic institutions are selling equities and FIIs are buying." In last two sessions, BSE Bankex lost 1067 points with all the bank stocks in the index closing with heavy losses ranging between 2.55 per cent to 9.51 per cent. Bank stocks suffered the most with NSE's CNX Bank index dropping 936.95 points in 2 sessions. The big losers included Union Bank (9.51 per cent), Yes Bank (8.15 per cent), Bank of Baroda (6.95 per cent), Bank of India (6.82 per cent), Axis Bank (6.63 per cent) and Punjab National Bank (6.24 per cent). via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNHpUAg9GBC5v7cAYilF9bd7SZoRNg&url=http://www.mydigitalfc.com/news/market-wipes-out-all-post-fed-gains-2-sessions-539

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