India’s benchmark Sensex slipped into correction territory on Monday, on persistent concerns over foreign outflows and lacklustre corporate earnings, while information technology and energy stocks led the losses.
The 30-share BSE Sensex followed the 50-stock Nifty and the small- and mid-cap indexes , which had slipped into correction on Nov. 13.
On the day, the Sensex fell 0.31% to 77,339.01 points, closing 10.05% below its record high level hit on Sept. 27. The Nifty fell 0.34%, declining for the seventh straight session, its longest falling streak in more than 20 months.
The relative strength index of Nifty fell below 30, indicating the benchmark may be ‘oversold’.
“Despite oversold conditions, caution prevails among investors in this correction phase, the steepest in four years post-(COVID-19) pandemic, which has seen price decline of over 10% from record highs without any significant interim bounce,” said Sameet Chavan, head of research at Angel One.
Indian shares have been hurt by tepid corporate earnings as well as about $15 billion of foreign outflows in the 34 sessions since record highs on Sept. 27.
Indian shares log sixth weekly losses in seven on dull earnings, foreign outflows
On Monday, IT companies, which earn a significant share of their revenue from the U.S., lost 2.32% after the Federal Reserve Chair Jerome Powell indicated slower rate cuts amid ongoing economic growth and above-target inflation.
Higher U.S. rates make emerging markets, such as India, less attractive to foreign investors.
Indian IT stocks had gained about 5% in the last two weeks on expectations of beneficial policies from U.S. President-elect Donald Trump’s administration.
Gas distributors Indraprastha Gas and Mahanagar Gas lost about 20% and 14%, respectively, after the government lowered the allocation of gas under regulated prices.
The metal index gained 1.9% as global aluminium prices rose after China said it would cancel export tax rebates.
Two-wheeler major Hero MotoCorp rose 2.8% after it beat quarterly profit expectations due to higher sales of mid-range motorcycles.
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