Markets Continue to Crack Further

Dalal Street succumbed to more selling on Tuesday as the demonetisation effect and weak earnings drove the Sensex lower by 565 points and the Nifty below 8100 intraday. Strengthening of bond yields and US dollar on US president-elect Donald Trump policy also weighed on market sentiment. Equity benchmarks closed below their 200-daily moving average. The 30-share BSE Sensex tanked 514.19 points or 1.92 percent to 26304.63, the lowest closing level since May 25, taking the total loss for two consecutive days to 1200 points. The 50-share NSE Nifty was down 187.85 points or 2.26 percent to close at 8108.45 after hitting an intraday low of 8093.20. 

While maintaining overweight rating on India, Chris Wood of CLSA said demonetisation will be negative for equities in short term, adding that the move is a positive for bond and currency markets. Besides, demonetisation will help increase deposit growth of banks significantly, he said. S Naren of ICICI Prudential MF said he does not expect February lows of 6900-7000 on the Nifty to be tested in near term.

Source: Moneycontrol