The index shed 1,643.95 pts in May, submerging the 895-point drop seen in the same month two years ago.
Bullish trend has abated, says Ramesh Damani.
MUMBAI: The Sensex’s absolute fall this month has been its steepest ever. The index shed 1,643.95 points in May, submerging the 895-point drop seen in the same month two years ago.
Of course, in percentage terms, the 13.7% drop this month is only the fifth worst.
In May 1992, the index had plunged as much as 22.7%.
FIIs and mutual funds have also created a record this month, the former offloading equity worth Rs 8,066 crore (the highest in any month), while the latter made equity purchases of Rs 7,572 crore.
"The weak international sentiment had its effect on the markets here. One can’t read much into today’s fall, apart from saying that the markets are in a stagnation or consolidation phase. But I think we are near the bottom now, though there could be one more shake-up before it slowly recovers," said Sandeep Shenoy, strategist at Pioneer Intermediaries.
"Generally, the bullish trend has abated and I see the markets drifting down on lower volumes. The kind of intense interest we saw in the Indian markets is dying down, but it’s too early to conclude that it has entered a bear phase," said Ramesh Damani, member, Bombay Stock Exchange. The Morgan Stanley Capital International Emerging Markets Index, which tracks shares of 26 developing countries globally, lost 0.2% to 755.68, taking the measure’s slump to 10% for the month.
The index has tumbled 14% since reaching an all-time high on May 8 as investors fled to the safety of bigger companies in larger markets and to bonds on concern central banks around the world will raise borrowing costs, slowing economic growth.
The slide in emerging markets in May is the steepest since an 11% drop in September 2002, when President George W Bush fanned concern the US may invade Iraq by speaking out against the nation at the United Nations. On Wednesday, all indexes in Asian market included in the MSCI Emerging Markets Index fell.
South Korea and Taiwan, the two biggest emerging markets in the MSCI gauge, were closed for holidays.
Hong Kong, home of the so-called H shares of Chinese companies that foreigners can trade freely, was also shut.
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