Why Indian market is falling daily?
Indian equities corrected massively, possibly reacting to US equities trending lower and rise in crude oil prices. In my view, there were no positive triggers to take the market upwards in the near term and which is why volumes in large cap names are down 20-30% in 2022 so far, as compared to 2021, even when market caps are higher by 20-25% on a year-on-year basis. While a further 500 points downside cannot be ruled out in the Nifty, on the brighter side, the stock market is much lighter and healthier, heading into the Union Budget, after the high in mid-October 2021. Corporate earnings have been positive so far and Omicron didn’t disrupt the economy materially. The structural story remains intact and I am confident that Nifty will achieve a higher high in 2022, than what we saw in 2021.
- Amar Ambani, Senior President & Head - Institutional Equities, YES Securities
Weak global cues ahead of the FED meet saw a fierce sell-off in new-age recently listed firms and stocks with high FII ownership. As the VIX rose more than 25% in late afternoon trade today, all sectoral indices were deeply in the red as the BSE Sensex breached the 57K mark. The broader markets were pounded as the Small & Midcap Indices lost almost 5% today. Though Indices pulled back a bit at the end, the fact that only a tad over 100 shares advanced depicted sentiments today. With the Nifty losing over a thousand points in the last five sessions, investors are bracing for higher volatility going forward.
- S Ranganathan, Head of Research at LKP Securities
It is falling because of
(1) High valuation
(2) FII taking money back home
(3) Rising oil price
(4) slower than expected result because inflation, salary hike took a big chunk of the profitability. Corporate results announced by market majors like CEAT, Asian Paints, etc. have been unable to meet the market expectations and this is also a reason why bulls are unable to take over from bears. In that case, investors may look at other asset classes like gold.
(5) Rupee vs dollar: In the last fortnight, Indian Rupee has fallen from 74 levels to around 74.50 levels, which is also a reason for FIIs fishing out money from the Indian markets as their return in dollar terms will go down drastically in this bear ridden market.
(6) Populist budget: The market is buzzing with reports that the upcoming Union Budget 2022 will be a populist budget as 5 state assembly elections are taking place immediately after the budget presentation and the central government may try to win the hearts of these state citizens in this budget.
However, there are pockets of a good result. FII will continue to take money home, let’s see, how DII and retail investors are able to resist the fall like they did in the month of Nov and Dec.
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