Sensex tumbles 292 points to end at 4-month low
Question marks over government’s reform initiatives, global woes erode Rs 1 lakh crore in investor wealth.Updated: Apr 04, 2013, 23:28 IST
Political uncertainty at the Centre raising question marks over the government’s reforms initiatives and weak macro-economic data, combined with doubts about a global recovery, are dragging the Indian markets down. Expectations of muted earnings from Indian companies in the fourth quarter are also affecting sentiments.
Falling for the second day, the benchmark Sensex on Thursday plummeted nearly 292 points, or 1.6%, to end at four-month low of 18,509.7, eroding around R1 lakh crore in investor wealth. The index has fallen 531 points in the last two trading sessions.
The broader National Stock Exchange Nifty also plunged below 5,600 level by losing 98 points, or 1.7%, to end at 5,575.
“Political uncertainty at the time when macro-economic data is showing that the Indian economy is not in good shape is taking toll on investors’ confidence,” said P Phani Sekhar, analyst, Angel Broking. “Investors are concerned that the reforms process may be stalled if the government falls. Expectations of weak corporate earnings have also made investors nervous.”
India’s economic growth outlook is still shaky with the current account deficit coming at 6.7% of gross domestic product.
Foreign institutional investors or FIIs, who sold shares worth around R368 crore on Wednesday according to provisional data from stock exchanges, were net sellers.
“Technology stocks were trading lower on weak US economic data while capital goods stocks were trading lower on concerns that the slowdown may restrict new orders,” said Alex Mathews, research head, Geojit BNP Paribas Financial Services.
Going ahead, the market will watch corporate earnings. “Investors will watch result numbers of pharma and IT sectors, which have been holding the market firm,” said Sekhar.