What Dalal Street Made Of Today’s Market Rout

Indian equity benchmarks wiped out their entire weekly gains with just today’s rout.

The S&P BSE Sensex and the NSE Nifty 50 Index closed the day at two-month low after they dropped 1.44 percent and 1.53 percent, respectively. The benchmarks closed the week down 1.03 percent and 1.15 percent, respectively, at 38,337 and 11,419.25. This is the second straight week of losses for the indices.

The broader market represented by the NSE Nifty 500 Index, too, fell 1.6 percent this week. The 500-share index closed the day down 1.6 percent.

Here’s what analysts have to say about today’s fall:

‘Not A Surprise’

The market witnessing a sharp correction is long overdue and not due to any “specific alarming reason”, said Saurabh Mukherjea, founder of Marcellus Investment Managers.

“We have had weak earnings growth in India for the best part of last six years and therefore, the market was unattractively valued for quite some time.”

‘Markets Will Eventually React To Earnings’

The markets have witnessed a fall post the budget. However, it’s the earnings that investors will watch out for and not the budget any longer, according to SBICAP Securities’ Nirav Sheth.

The Nifty is expected to be around 12,300 by the end of the current financial year, the head of institutional equities at the brokerage told BloombergQuint.

‘Market Needs To Fall Further To Create Buying Opportunities’

The markets need to decline further to create buying opportunities, according to Capitalmind’s Founder Deepak Shenoy. “A lot of stocks are available at attractive levels at present,” he told BloombergQuint in an interaction.

The current market situation, Shenoy said, is not related to surcharges that affects foreign investors and is mostly related to changes in liquidity.

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