Indian Indices Continue Sell-Off; Sensex Down Over 550 Points

Share markets in India are presently trading on a negative note. All sectoral indices are trading in red with stocks in the realty sectorbanking sector and capital goods sector witnessing maximum selling pressure.

The BSE Sensex is trading down by 559 points (down 1.6%), while the NSE Nifty is trading down by 172 points (down 1.6%). The BSE Mid Cap and the BSE Small Cap index are trading down by 1.5%.

The rupee is trading at Rs 71.31 against the US$.

Ankit Shah offers an interesting observation around the falling stock markets in India.

Here's what he wrote in a recent edition of The 5 Minute WrapUp...

  • The BSE Sensex closed at 34,057 at the end of 2017. It gained 14% to hit a life-time high of 38,897 on 28 August 2018. Thereafter, the Sensex has been in correction mode through September and October. However, after hitting a year-to-date low of 33,349 in the last week of October, the Sensex has reclaimed the 35k level.
  • While the Sensex has shed most of its gains in 2018, it still doesn't appear so bad in Indian rupee terms. But for foreign investors, the fall in the Sensex has been worse, because they're also exposed the currency risk.

The below chart shows the difference between the performance of the Sensex and the Dollex 30 index (Sensex in US dollar terms).

Dollex-30 Is Down 10% in 2018


You can see how the trend between the Sensex and Dollex-30 diverged since February 2018.

The Dollex-30 index has declined 10% in 2018 so far.

No wonder that foreign investors have been dumping Indian stocks. Since April 2018, foreign investors have sold equities worth Rs 56,550 crores. What is worth noting is that Rs 27,623 crores worth of equities were sold in the month of October alone.

It would be interesting to see how this trend follows.

In the news from the pharma spaceJubilant Life Sciences is witnessing selling pressure today after the US health regulator recommended a regulatory or administrative action after the inspection of the drug firm's Roorkee manufacturing facility.

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Disclosure: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. ...

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