Summarize

Simplifying... Inshort

Despite a generally positive market, India's leading indices are suffering due to heavy foreign selling, with over ₹27,600 crore withdrawn in November alone.
Analysts attribute this downturn to the "Trump factor," which has strengthened the dollar and increased US bond yields, creating challenges for emerging economies like India.
Amid this correction, experts advise investors to be selective, favoring sectors like banking, digital companies, hotels, pharma, and IT over those facing growth slowdowns such as cement, metals, and petroleum refining.

Was a long read? Making it simpler...

Next Article

Sensex and Nifty are over 10% down from their September peaks

Sensex, Nifty decline for sixth straight session: Know key reasons

By Mudit Dube

Nov 14, 2024

05:40 pm

What's the story

India's stock markets continued their losing streak for the sixth consecutive day on Thursday. The downward trend is largely attributed to concerns over foreign investor exits and global market dynamics. The benchmark Sensex dropped over 250 points, while the Nifty fell by more than 100 points during intraday trade. Sensex and Nifty are over 10% down from their September peaks, forcing the leading indices into a correction zone.

Foreign influence

Market indices impacted by foreign selling

Despite most broader market indices trading in the green amid reduced volatility, the frontline indices have taken a hit from continued foreign selling. Foreign Portfolio Investors (FPIs) have withdrawn over ₹27,600 crore in November alone. "Nifty is unlikely to gain momentum due to a bearish outlook fuelled by an FII exodus," said Prashanth Tapse, Senior VP at Mehta Equities. While domestic institutional investors (DIIs) could provide some stability, the unprecedented foreign selling has kept Dalal Street investors on the edge.

Market analysis

Analysts attribute market correction to 'Trump factor'

Analysts now say the stock markets have entered a corrective phase. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said this shift can be attributed to several key factors, including the "Trump factor." "The Trump factor has triggered many profound changes in markets already. The dollar index is strong and rising and is currently at 106.61. The US 10-year bond yield is at 4.48%." "These two are strong headwinds for equity markets in emerging economies like India," he added.

Investor guidance

Investment advice amid market correction

Vijayakumar advises that while a market bounce-back is possible due to strong domestic liquidity, investors should be selective. He warns against investing in sectors like cement, metals and petroleum refining which are facing a growth slowdown. Instead, he recommends sectors like banking, new-age digital companies, hotels, pharma and IT where growth prospects are good.