FIIs withdrew Rs 20,000 crore during Lok Sabha elections and Q4 earnings amid stress from rising bond yields, Iran-Israel war, and India-Mauritius tax tweak. Impact on oil prices and US Fed rate cuts outlook are also significant factors.
Global funds sold $2.4 billion of Indian shares on a net basis last week, the most since June 2022. They sold another $374 million on Tuesday, according to provisional data, as trading resumed after Mondays surprise trading holiday announcement.
While the headline index Nifty fell around 0.5% on Monday morning, the pain was deeper in the broader market with both mid and smallcap indices trading around 1% lower. Out of nearly 3,600 stocks that traded on BSE today, the vast majority of around 2,500 were trading in the red.
The Sensex, India s headline equity index, has experienced a sharp decline, losing over 1,600 points in just three days. This has resulted in investors losing approximately Rs 4 lakh crore. The market capitalization of all companies listed on the BSE has also fallen to Rs 319.5 lakh crore. The decline in the market is attributed to factors such as the US Federal Reserve s decision to project an interest rate hike, rising bond yields, a stronger dollar, higher crude oil prices, expensive valuations, foreign institutional investor selloff, and technical factors.