Mkts enter consolidation phase

Mumbai : Equity benchmark indices Sensex and Nifty extended their losing streak for the sixth straight session and settled sharply lower on Monday dragged down by heavy selling in bellwether stocks amid mixed global trends and outflow of foreign funds.

The BSE Sensex tumbled 638.45 points or 0.78 per cent to settle at 81,050. During the day, it plummeted 962.39 points or 1.17 per cent to 80,726.06. The NSE Nifty slumped 218.85 points or 0.87 per cent to end at 24,795.75. Market capitalisation (mcap) of BSE-listed companies dropped by Rs8.90 lakh crore to Rs4,51,99,444.70 ($5.38 trillion). “The Indian markets have entered a consolidation phase with high risk of underperforming to Asian peers. This phase is marked by significant corrections in the broader market due to premium valuations. There is notable global arbitrage activity, with Chinese markets attracting substantial inflows driven by its attractive valuations and stimulus measures,” Vinod Nair, head (research) at Geojit Financial Services, said.

“With the inflation rate at 3.65 per cent in August, falling below the 4 per cent target, there is cautious optimism despite ongoing concerns about food inflation and crude prices due to Middle East tensions. The favourable monsoon and the Fed’s rate cut provide the RBI with ample opportunity to adjust its policy and implement rate cuts in the foreseeable future. This is expected to support the market in the long run by providing liquidity and bolstering the economy’s growth trajectory,” added Anwin Aby George, Research analyst at Geojit Financial Services.

The BSE midcap gauge dropped 1.85 per cent and smallcap index plummeted 3.27 per cent.

“Investors are reassessing their portfolio positions and FIIs outflows are exacerbated. Amid escalating geopolitical tensions, the surging oil prices poses a further challenge to the domestic economy in the short-term,” Nair added.

From the 30 Sensex firms, Adani Ports & Special Economic Zones, NTPC, State Bank of India, PowerGrid, IndusInd Bank, Axis Bank, HDFC Bank, Titan and UltraTech Cement were the major laggards. Mahindra & Mahindra, ITC, Bharti Airtel, Infosys, Bajaj Finance, Tata Consultancy Services and Tech Mahindra defied the trend.