Benchmark indices registered their biggest one-day fall in nearly seven months as bears reigned on Dalal Street for the fourth straight day on Monday.
The BSE Sensex tumbled 1,600 points in the intra-day trade, and is now down over 3,700 points from its record high level of over 62,000.
The Nifty50, meanwhile, tanked 348 points yesterday, and has now erased around 1,200 points from record high level.
Overall, the indices ended at 58,466 and 17,416 levels, respectively, in a broad-based sell-off.
Markets have been in a risk-off mood since last week, which only escalated yesterday with fresh lockdowns being announced in countries like Austria and clamp down on activities across other European countries.
The dollar index rising above 96, and the subsequent FII outflow, emerged as other concerns for India.
Domestically, rich valuations and negative news flow around Reliance Industries added to the woes.
Going-forward, tech charts suggest more pain ahead for equity investors in the near-term as key support and resistance zones shift downwards.
Fundamentally, too, analysts see more downside to the on-going correction. However, they see this meltdown as a ‘healthy correction’ within a broad bull market.
Jigar Shah, who is chief executive officer at Kimeng Securities India, also feels road ahead for Indian equities won’t be too bumpy over the medium-term as FII inflow may resume in 2022.
India, he says, will be able to attract foreign flows next year as China’s attraction has reduced over time.
“From a micro perspective, India will remain attractive as there are individual stories – whether in e-commerce, renewables space, consumer and healthcare – that will play out and continue to attract foreign capital,” said Jigar Shah, chief executive officer, Kimeng Securities India
Shah points out that India has borne the brunt of FII selling in the equity segment in the last few weeks as rising inflation and inflation-adjusted currency fluctuations are a concern.
But, from a macro-perspective, India will remain attractive as there are individual stories – whether in e-commerce, renewables space, consumer and healthcare – that will play out and continue to attract foreign capital next year.
As regards Tuesday’s session, apart from the secondary market correction, investors will eye the debut of Latent View Analytics.
Shares of the company will list on the bourses today and were trading with a strong premium in the grey market yesterday, despite weakness in the secondary market.