BENGALURU: On Wednesday, Indian equities ended around two-month lows with losses reported by banks, energy, and metal industries as concerns about a global recession dampened risk sentiment.
The S&P BSE Sensex (.BSESN) closed down 0.9% at 56,598.28, while the NSE Nifty 50 index (.NSEI) down 0.9% to 16,858.60. Both indices have seen their longest losing streak since mid-June after falling for a sixth straight session.
On Wednesday, stocks throughout the world fell to their lowest levels in two years as rising borrowing prices and a growing energy crisis fueled worries that the world would enter a recession.
Rising interest rates and bond yields had raised the investment barrier for equities, said Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services.
Meanwhile, fear of recession because of “very high” interest rates, was adding pressure, he said.
Foreign institutional investors sold a net 28.24 billion Indian rupees ($345.63 million) of Indian equities on Tuesday, while domestic investors purchased 35.05 billion rupees shares, as per provisional data available with the National Stock Exchange
Overseas investors would not be interested in coming back to the markets at this point of time unless the currency stabilises,” said Joseph Thomas, head of research, Emkay Wealth Management.
“We need to see the trajectory of U.S. interest rates from the current aggressive approach moderate over the next 2-3 quarters, also need to see the direction of the Indian monetary policy and some stability in the currency.”
Investors are waiting for the Reserve Bank of India’s monetary policy announcement on Friday.
Markets will take defensive positions before the result of the RBI policy, Khemka continued.
