FIIs Turn Net Buyers In The Market !
In an attempt to boost demand and increase consumer sales in the gloomy economic conditions, the RBI announced lowering of repo rate by 25 basis points. The central bank stated that it will continue with an accommodative stance as long as it is necessary to revive the growth momentum. For many, the 25 bps cut was below expectation, so the markets failed to react confidently to the fiscal stimulus.
During the fortnight, global indices slipped due to the increasing dispute over trade and foreign policies between the US and China. Nikkei index declined the most by 3.19 per cent. China’s Shanghai index and Hong Kong’s Hang Seng registered a fall of 2.41 per cent and 1.53 per cent respectively, mainly due to the persistent worries and often violent
protests against Chinese regime in Hong Kong. With the slowdown in global growth, markets displayed low confidence. Dow Jones Industrial Average and FTSE100 were both down by 1.75 per cent each. S&P 500 and NASDAQ declined by 1.77 per cent and 1.93 per cent, respectively. DAX index was down by 1.98 per cent and CAC 40 was down by 1.94 per cent.
As for the domestic markets, Sensex and Nifty was down by 3.99 per cent and 4.08 per cent, respectively. The domestic sectoral indices registered a fall during the fortnight, which could be considered as a correction to the recent increase in the market during previous weeks. The Smallcap and Midcap indices were down by 6.28 per cent and 6 per cent, respectively. The Auto index slipped by 5.91 per cent. Metal and Realty indices underperformed significantly with a decrease of 10.29 per cent and 10.14 per cent, respectively. Similarly, Power and Bankex also underperformed, down by 1.59 per cent and 8.97 per cent, respectively. FMCG was down by 2.84 per cent. During the fortnight, IT index was up by 2.09 per cent.
The trading data for the FIIs and DIIs showed that for the fortnight, FIIs were net buyers to the tune of Rs. 9301.17 crore, whereas DIIs were net sellers to the tune of Rs. 5181.59 crore.
The market is still battling with the global uncertainties and domestic slowdown. Despite the government initiatives, the turbulence in markets persists. For the fortnight, gold prices continued to rise and reached Rs. 39330 for 10g of 24 carat gold, which is an increase of 0.95 per cent. For the same period, Brent crude prices softened, lowering by 10.04 per cent to US $52.75. As the Asian currencies weakened due to fragile market sentiments, rupee too depreciated by 14 paise to close at 71.02 against USD on October 7, 2019.