D-Street indices tumble as FPI selloff continues
selloff that sent benchmark indices tumbling 1.5%, reflecting the impact of persistent stock sales by overseas funds amid hardening bond yields in the US, the world's biggest market for pricing both debt and risk assets alike.
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Furthermore, uncertainty over the implications of stricter disclosures on ultimate beneficial ownership for foreign funds from February 1 weighed on the sentiment at Dalal Street, where the benchmark Nifty has lost more than 4% since hitting its record high on January 16. An unusually long and sharp spell of decline in the stock of HDFC Bank, the biggest Nifty contributor by weightage, has triggered the broader selloff.
Nifty Bank Index Falls 2.3%
On Tuesday, the BSE Sensex dropped 1.49%, or 1,061.96 points, to 70,361.69. NSE Nifty declined 1.55%, or 334.95 points, to close at 21,236.85. Of the 50 top stocks, only 11 advanced.
Elsewhere in Asia, Hong Kong gained 2.63%, South Korea climbed 0.58%, Indonesia rose 0.11%, Taiwan ended 0.33% up and China rose 0.53%. The pan-Europe index Stoxx 600 ended 0.3% lower. In the US, the benchmark S&P 500 and the Nasdaq were trading lower at the time of going to press as a mixed bag of earnings from industry bellwethers threatened to douse a recent rally.
Back home, banks were among the top index laggards amid speculation foreign investors were trimming their holdings in HDFC Bank on concerns about the lender's profitability. The Nifty Bank index fell 2.3%.
«The approaching monthly expiry along with the deep selling by foreign investors are the primary causes behind this correction,» said Shrikant Chouhan, executive VP and head of equity research, Kotak Securities.
