“The equity markets remained under stress as the transmission of the news of bank failures adversely affected the sentiment. The hike in the base rate by the US Federal Reserve (US Fed), Bank of England, and the persistence of inflation has been viewed as negative for the markets in the immediate term,” said Joseph Thomas, Head of Research, Emkay Wealth Management.
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Meanwhile, the persistent sell-off by foreign portfolio investors, too, dented overall markets. So far this month, FPIs have sold Rs 246 crore worth of equities, with only five days of buying periods.
Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services believes that FPIs have been sellers in most emerging markets except China which continues to witness inflows due to the opening-up trade.
“FPIs are likely to be cautious in the near-term since there is a risk-off in equity markets globally due to the stress in the US banking system and crash in banking stocks. In India, inflows will be mainly targeted at domestic economy-facing sectors like banking, capital goods and autos. A contrarian trend in favour of IT and pharmaceuticals is likely in the near-term since the valuations of these segments have turned attractive after the recent corrections,” he added.