Benchmark stock market indices started the week on a downward trend on Monday, opening lower as investor confidence remained subdued. Factors such as continuous Foreign Institutional Investor (FII) outflow, a weakening rupee, and uncertainty surrounding a trade deal with the US contributed to the negative sentiment.
The S&P BSE Sensex dropped by 49.63 points to 85,662.74, while the NSE Nifty50 declined by 29.85 points to 26,156.60 by 9:26 am. Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, noted that the persistent devaluation of the rupee has led to ongoing selling by FIIs in the market.
He highlighted another concerning factor, stating that the spike in Japanese bond yields could potentially trigger a reversal of the yen carry trade, leading to increased volatility in the market. In the early trading hours, top gainers included Tech Mahindra, Infosys, Reliance Industries, Tata Consultancy Services, and Eternal, which helped bolster market sentiment initially.
Conversely, there were notable decliners, with Bajaj Finance experiencing the most significant drop of 1.00%. Other notable losers included Bharat Electronics, Asian Paints, Axis Bank, Mahindra & Mahindra, and Maruti Suzuki, all registering declines.
Vijaykumar emphasized that positive and negative news developments could contribute to ongoing market volatility in the short term. However, he expressed optimism regarding robust economic growth and signs of a revival in earnings growth, underpinned by significant fiscal and monetary stimulus measures. The recent 8.2% Q2 GDP growth and the RBI’s upward revision of FY 26 GDP growth to 7.3% were cited as positive indicators for the market.
He also mentioned that while low inflation has impacted nominal GDP growth and corporate earnings, leading indicators suggest a potential 15% earnings growth in FY 27, which bodes well for the market.
The article concluded with a disclaimer advising readers to seek advice from qualified brokers or financial advisors before making any investment decisions.