Turnover continues to be low in the cash market segment, accounting for just Rs 9,946.73 crore on both the NSE and BSE combined.
MUMBAI: Just when investors had started to gingerly dial broking firms comes another blow to their solar plexus.
A late-afternoon burst of selling took the Sensex down 3.56% or 370.87 points on Monday.
There were two reasons touted for this: One was by Kalpana Morparia, joint managing director of ICICI Bank, who said interest rates could be rising anew.
The second was the buzz that the Securities and Exchange Board of India is planning physical settlement in the F&O segment.
This led to substantial profit selling.
“Profit-booking had to happen after the rebound of last week. Investor interest after being caught off-guard normally wanes. But now, they have started to come back,” said Seshadri Bharatan, country head for equity broking and distribution at Dawnay Day AV.
Are we back to another downward spiral?
Kamlesh Gandhi, executive director of Centrum Capital, said the indication from his dealing room is that the worst seems to be over.
“Before last week, there were absolutely no phone calls as investors decided to remain on the sidelines. But slowly, but surely, they have started showing interest again, and want to know what’s happening,” he said.
But technical analyst Vijay L Bhambwani differs. He says since the Nifty fell below 2980, a short-term support was breached. “Therefore a further fall can be expected,” he says.
Turnover continues to be abysmally low in the cash market segment, accounting for just Rs 9,946.73 crore on both the NSE and BSE combined.
This is as against the average daily volumes of Rs 13,510.35 recorded in May.
The Sensex closed down 3.56% at 10,042.06 points on Monday, while the Nifty was also down 3.51% at 2,943.20 points.
The day also saw foreign institutional investors being net sellers by a marginal Rs 1.19 crore. They’ve been buyers by Rs 1,768.90 crore in June so far.
Brokers say that the markets can be expected to remain volatile till the expiry of the June series futures contracts and the US Fed meeting later this week that will indicate the US central bank’s view on interest rates and inflation.
The near-term triggers for the market are the first quarter results which will kick in from the beginning of the next month, and the progress of the monsoon.
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