Sensex back to where it was last November
After last year's rally driven by expansion in valuations, investors are booking some profits, especially as earnings estimates are still being cut
Monday saw a plunge in the Indian and Chinese stock markets, not echoed by other markets in either Asia or Europe. Provisional numbers from the National Stock Exchange (NSE) showed foreign portfolio investors were selling, while domestic institutions shored up the Indian market.
The fact of the matter is that after a stellar run last year, the Indian market is showing signs of exhaustion. A year-to-date performance comparison of various indices shows that the MSCI India index has been struggling to perform (see chart).
This data is as on 17 April and in local currencies for respective countries. After the benchmark Sensex shed 2% on Monday, India’s position would slip further. The Sensex is back to where it was at the beginning of November.
The markets have been moving in a range since then and a breakout has proved difficult because of the lack of fresh triggers. After last year’s rally driven by expansion in valuations, investors are booking some profits, especially as earnings estimates are still being cut.
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