Stock indices slide on profit-booking
Speculation are that MSCI will have China’s mainland shares, which may squeeze weightage of countries like India and spark outflows by foreign investors.
By ET Bureau | Updated:
MUMBAI: Indian stock indices retreated from their seven-month highs on Thursday, falling close to 1 per cent as caution set in ahead of key global events in the short term and index major Infosys slumped the most in nine months on concern over margin pressure going ahead.
Weakness in overseas markets added to the domestic markets’ woes. Asian stocks ended weak, with Japan’s Nikkei ending 1 per cent lower, as the yen gained.
The Sensex slipped below the 2,7000-mark to end at 26,763.46, down 257.20 points, or 0.95 per cent. The NSE Nifty ended a shade above the 8,200-mark at 8,203.60, down 69.45 points, or 0.84 per cent. Analysts said investors have begun booking profits after the recent run-up with the market being on the edge ahead of events such as the US Federal Reserve’s rate setting meeting on June 14-15 and the Brexit referendum on June 23. Since March 1, indices have gained around 17 per cent, after falling 12 per cent in the first two months of 2016.
"It is more of a pullback than anything else. With all these events lined up, people are taking some profits off the table," said Ravi Gopalakrishnan, head-equity at Canara Robeco Mutual Fund. "The Brexit is the bigger concern for the market than Fed because it has not been priced in".
Investors will also watch the MSCI’s index review on June 14. Speculation is rife that MSCI will include China’s mainland shares, which may squeeze weightage of countries such as India and spark outflows by foreign portfolio investors.
"Couple of positives have been discounted in the market, be it the monsoon, the policy actions by the government and better-than-expected fourth quarter earnings. From here, for markets to scale and sustain the higher levels, we need to watch out for real onset of monsoon and its progress," said Harsha Upadhyaya, CIOequities at Kotak Mutual Fund.
Weakness in overseas markets added to the domestic markets’ woes. Asian stocks ended weak, with Japan’s Nikkei ending 1 per cent lower, as the yen gained.
The Sensex slipped below the 2,7000-mark to end at 26,763.46, down 257.20 points, or 0.95 per cent. The NSE Nifty ended a shade above the 8,200-mark at 8,203.60, down 69.45 points, or 0.84 per cent. Analysts said investors have begun booking profits after the recent run-up with the market being on the edge ahead of events such as the US Federal Reserve’s rate setting meeting on June 14-15 and the Brexit referendum on June 23. Since March 1, indices have gained around 17 per cent, after falling 12 per cent in the first two months of 2016.
"It is more of a pullback than anything else. With all these events lined up, people are taking some profits off the table," said Ravi Gopalakrishnan, head-equity at Canara Robeco Mutual Fund. "The Brexit is the bigger concern for the market than Fed because it has not been priced in".
Investors will also watch the MSCI’s index review on June 14. Speculation is rife that MSCI will include China’s mainland shares, which may squeeze weightage of countries such as India and spark outflows by foreign portfolio investors. "Couple of positives have been discounted in the market, be it the monsoon, the policy actions by the government and better-than-expected fourth quarter earnings. From here, for markets to scale and sustain the higher levels, we need to watch out for real onset of monsoon and its progress," said Harsha Upadhyaya, CIOequities at Kotak Mutual Fund.
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