Two stock markets in one: An unexplained anomaly not seen before

Bank credit is not growing because companies are still focused on deleveraging their balance sheets, while higher interest cost is squeezing the net interest margins of banks

Over the past two months, in four separate columns, I have highlighted the significant slowdown in the Indian economy, which is now clearly reflected in the stock prices of major sectors such as passenger cars, consumer goods, banks, financial services, and infrastructure. The two key market indices, the Nifty and Sensex, peaked on September 27 and have since shown little momentum. A sharp two-day rally, a day before and after the Maharashtra election results, was seen as a lucky break for foreign institutional investors (FIIs) to resume their selling. While each such wave of selling will be countered by some