Until there is some positive announcement from the government, the markets are going to be under pressure,”said Andrew Holland, CEO, Avendus Capital Alternate Strategies.
“The comments made by some government officials have dimmed hopes of a stimulus. We continue to expect some weakness in the near term,” said Vivek Ranjan Misra, head of fundamental research, Karvy Stock Broking.
The benchmark indices have fallen over 2.5 per cent in the last three trading sessions. The latest correction has erased all the year-to-date gains for the Nifty.
The index is down over a per cent so far this year, though the Sensex
returns are marginally positive.
From their all-time highs in early June, the Nifty and the Sensex have corrected 11.2 per cent and 9.4 per cent, respectively. The stock price fall in the broader market has been steeper, with the Nifty MidCap 100 and SmallCap 100 falling 15 per cent and 20 per cent, respectively, this year.
The Nifty MidCap 100 on Thursday fell 1.9 per cent to 15,175, a level last seen in January 2017. Meanwhile, the Nifty SmallCap 100 dropped 2.8 per cent to 5,209, its lowest close since June 2016.
Foreign portfolio investors (FPIs) have aggressively pulled out from the Indian markets since the Union Budget. They have sold shares worth Rs 22,000 crore ($3.2 billion) since July 1. On Thursday, they pulled out another Rs 900 crore from equities,
even as the market regulator eased rules for FPI investments.
Disappointing June quarter results have compounded investor woes.
The earnings reported by most companies were below Street expectations, forcing many analysts to scale back their earnings growth targets for the ongoing financial year.