Indian stocks fell today from record highs as investors posted gains. The Nifty 50 index, which had hit a record high of 13,145 in early trading, fell 1.5% to 12,858. The Sensex fell almost 700 points to 43,828, sweeping ₹Rs 2.2 crore lakh of investor wealth.
Ashis Biswas, head of technical research at CapitalVia Global Research, attributed the strong selloff in Indian markets to profit-taking after the recent rally. “We have seen volatility expand in today’s trading session, indicating earnings reserve and stock distribution at a higher market level,” he said.
India’s VIX index, commonly known as a fear indicator, was up 10% to 23.15 today.
Eleven of the 12 industry indices ended lower, with the pharmaceutical and real estate indices falling more than 2% each. TI shares fell 1.62%.
Only state banks ended up on the rise. The Nifty PSU banking index that tracks them advanced 1.8%. The National Bank of Punjab was up 3.1%, while the Bank of Baroda was up 4.7%.
Private sector banks HDFC and Kotak Mahindra were the top hurdles for the Nifty 50, followed by IT services firm Infosys.
Meanwhile, global stocks hit a record after a breakthrough on Wall Street that saw the Dow Jones benchmark break 30,000 in the transition of US President-elect Joe Biden to the White House and increased optimism that a COVID-19 vaccine would be ready soon.
Record net foreign purchases so far this month have pushed Indian stocks to new highs. So far this month, foreign portfolio investors have ₹55 billion rupees in the Indian stock markets, pushing Sensex up 10% so far this month.
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Here’s what analysts had to say about the current market performance:
Ajit Mishra, Vice President of Research, Religare Broking Ltd
“It is normal to see an intermediate decline in a trend and we may see more profit taking in the future. Furthermore, volatility is also likely to remain high due to the scheduled expiration of derivatives. Nifty has the next crucial support in 12,700. Considering the scenario, they suggest limiting bare leveraged trades and preferring hedged positions. “
Vinod Nair, Head of Research at Geojit Financial Services
“The market recovery that was led by developments in vaccine and FPI inflows came to a halt today due to profit booking across all sectors in the second half of the trading session. While western markets continued their positivity, Encouraged By News About Vaccine Developments And Facility In America Political Risk “.
“We can expect the earnings reserve to continue in our domestic market, in the short term, as the liquidity-driven rally may pause and have reached a monthly all-time high. This money was driven by the overwhelming US result. Elections that unleashed large amounts of funding that were suspended. FIIs can take a breather and check out the next phase of policies in the US and Europe by 2021. “
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