Mumbai, March 26: Close to Rs 1.71 lakh crore of investor wealth got wiped out today on worries that foreign investors, whose ownership of domestic shares has hit a record, may trim their positions after Saudi Arabia launched air strikes in Yemen.
The BSE Sensex and Nifty fell more than 2 per cent to a more than 10-week low as foreign portfolio investors sold stocks worth Rs 521 crore today.
The market cap of BSE-listed companies also fell below Rs 100 lakh crore to Rs 99,66,783 crore.
Today's Sensex fall was the biggest since January 6, 2015 when it had plunged 854.86 points, or 3.07 per cent.
The Sensex has now registered its longest losing streak - seven days - in 2015. It has lost 1280 points in this time because of a host of domestic worries that included a tepid earnings season ahead.
Blue chips with heavy foreign institutional holdings led the declines after Saudi Arabia and its Gulf region allies launched military operations including air strikes in Yemen on Thursday to counter Iran-allied forces besieging the southern city of Aden where the US-backed Yemeni president had taken refuge.
Brokers added that the negative global cues came on the last day of monthly derivative contracts. Disappointing data from the US economy increased the selling pressure.
The benchmark BSE Sensex opened at 27937.62 and gradually hit an intra-day low of 27384.87 before concluding at 27457.58, a steep fall of 654.25 points, or 2.33 per cent.
The NSE Nifty slipped 189 points, or 2.21 per cent, to end at 8342.15.
Foreign funds worry
Foreign flows have been the backbone of a record-setting rally in Indian shares since last year on the Modi government's promise of reform-led economic revival. Foreign investors have pumped in $16.1 billion in 2014 and $5.8 billion so far this year.
That has brought foreign ownership of Indian shares to the highest ever, making the country the most overweight among emerging market funds.
As a result, any fears of exits can have a big impact on shares, especially as an expected pick up in earnings growth is taking more time.
Global markets
Elsewhere in Asia, markets mostly fell in line with an overnight sell-off on Wall Street after weak US data hinted at ongoing weakness in the world's biggest economy.
European markets were also trading lower with deep cuts of up to 2 per cent.
Key Asian indices in Hong Kong, Japan, South Korea and Taiwan fell 0.13 per cent to 1.39 per cent, while those in China and Singapore firmed up 0.37 per cent to 0.58 per cent.
In Europe, France's CAC, Germany's DAX and the UK's FTSE dropped 1.36 per cent to 1.98 per cent.
Road ahead
Despite the sharp cuts seen in the benchmark indices, experts feel that a revival is unlikely at least over the next few days as there are no domestic triggers to take the market forward.
In such a scenario, the domestic stock prices are expected to react to any international developments.
Investor attention will also be focussed on the bi-monthly monetary policy to be announced by the Reserve Bank of India apart from the fourth quarter results.
"The F&O expiry and potential geo-political issues in West Asia impacted markets today.
"Going ahead, there are no immediate triggers for the markets on the domestic front and, hence, markets may continue to be dictated by global factors. Quarterly results are also expected to be subdued. Further action on the fiscal or monetary front, if any, can give some upside to the market," Dipen Shah, head of private client group research at Kotak Securities, said.
In today's trading, selling was broad-based as 11 out of 12 sectoral indices closed lower.
via Business - Google News http://ift.tt/1IB1eqk
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