MUMBAI: The selloff in the Indian market Monday was led by foreign funds with a Rs 10,000-crore-plus net outflow. On the other hand, domestic institutional investors were net buyers at Rs 9,156 crore, but still could not cushion the selloff. Gold and crude were trading 1% lower in early trades in New York, while bitcoin slumped over 8% to a multi-month low.
The day’s session in India was greatly impacted by selloff in Japan and South Korea, and in Taiwan. While Nikkei in Japan plunged over 12%, Korea and Taiwan each were down 9%. Following its global peers, the Indian market opened gap down and corrected sharply during the day, said Siddhartha Khemka, head (retail research), Motilal Oswal Financial Services.
Post mid-session, “European stocks fell, extending last week’s decline amid a deepening global rout in equities and a rotation away from the technology shares that have powered this year’s rally,” said Deepak Jasani, head of retail research, HDFC Securities. “Going forward, we expect volatility to continue ahead of RBI policy and multiple global headwinds, including the unwinding of yen carry-trades, recession fears in the US, and escalating tensions in the Middle East. The US slowdown is a bigger concern and sooner or later the US Fed will bite the bullet of interest rate cuts which should provide relief in the current environment,” Khemka said.
As the day’s session showed high volatility, its gauge, India VIX, was up 52% during the day. VIX indicates fear among investors about the market and the economy in the near future.
According to Anand James, chief market strategist, Geojit Financial Services, just a few sessions ago, India VIX was not far from record low, which magnified the rate of rise on Monday. “In absolute terms, we are still way below the VIX seen around the (Lok Sabha) election results,” he said.
In Monday’s session, the selloff in midcap and smallcap stocks was even worse. As a result, BSE’s midcap index closed 3.8% down while the smallcap index closed 4.1% lower.
The day’s session in India was greatly impacted by selloff in Japan and South Korea, and in Taiwan. While Nikkei in Japan plunged over 12%, Korea and Taiwan each were down 9%. Following its global peers, the Indian market opened gap down and corrected sharply during the day, said Siddhartha Khemka, head (retail research), Motilal Oswal Financial Services.
Post mid-session, “European stocks fell, extending last week’s decline amid a deepening global rout in equities and a rotation away from the technology shares that have powered this year’s rally,” said Deepak Jasani, head of retail research, HDFC Securities. “Going forward, we expect volatility to continue ahead of RBI policy and multiple global headwinds, including the unwinding of yen carry-trades, recession fears in the US, and escalating tensions in the Middle East. The US slowdown is a bigger concern and sooner or later the US Fed will bite the bullet of interest rate cuts which should provide relief in the current environment,” Khemka said.
As the day’s session showed high volatility, its gauge, India VIX, was up 52% during the day. VIX indicates fear among investors about the market and the economy in the near future.
According to Anand James, chief market strategist, Geojit Financial Services, just a few sessions ago, India VIX was not far from record low, which magnified the rate of rise on Monday. “In absolute terms, we are still way below the VIX seen around the (Lok Sabha) election results,” he said.
In Monday’s session, the selloff in midcap and smallcap stocks was even worse. As a result, BSE’s midcap index closed 3.8% down while the smallcap index closed 4.1% lower.
