INSUBCONTINENT EXCLUSIVE:
Equity investors on Dalal Street lost over Rs 2 lakh crore on Friday as a sudden downturn in the benchmark indices cut combined market
capitalisation of the BSE-listed companies to Rs 143.39 lakh crore from Rs 145.56 lakh crore
The BSE Sensex traded 600 points down at 35,827 at 3 pm.
Analysts called it mean reversion for the market, which had outperformed its
global peers for the past one month
Indian equity indices, which usually enjoy a positive correlation with Dow Jones, have been moving in contrasting direction since November
Growing concern over economic slowdown has sparked the major selloff on Wall Street over the past two months, that has left the Nasdaq on
the verge of slipping into the bear territory
(See chart)
On Dalal Street, as many as 27 components in the 30-share Sensex traded in the red on Friday, with Maruti Suzuki falling 3 per
cent, followed by Asian Paints (down 2.62 per cent), Infosys (down 2.55 per cent), YES Bank (down 2.38 per cent) and ICICI Bank (down 2.32
Going by the buzz on Dalal Street, here are six top reasons that has dragged the market:
1) Smart money has started booking profits,
Amid the global uncertainty, foreign institutional investors are not taking any risk going into a long holiday.
2) Market is reverting to
mean after outperforming for several days
Stocks that logged significant gains over the past few days have seen major corrections, signalling profit booking.
3) Global equity markets
continued to remain under pressure after the US Federal Reserve indicated that it was set on its path to hike interest rates next year
despite signs that global economic growth is stuttering
The threat of a US government shutdown further inflamed investor unease over the economic outlook
On Wall Street, the Dow declined 464 points, or 1.99 per cent, to 22,859 on Thursday, while the SP500 plummeted 40 points, or 1.60 per cent,
and the Nasdaq 108 points, or 1.63 per cent, to 6,528.
4) The rupee came under fresh pressure on Friday and slipped 56 paise to quote at
70.26 against the US dollar in afternoon trade.
5) Energy stocks are under pressure as crude oil prices have tanked sharply in global
markets over the past few days
While crude prices did look up on Friday on Opec signal for higher cuts, the outlook remains grim
Crude prices fell some 5% on Thursday.
6) A strike by All India Bank Officers' Confederation impacted trading volumes in foreign exchange
and debt markets, although private banks are not affected by the strike
The protest is against bank merger, which they say will lead to job cuts and allow private lenders to dominate the industry.
