JOIN USDomestic equities plunged for the second consecutive day as investor sentiment was adversely impacted by continued political uncertainty in the country consequent to Bharatiya Janta Party (BJP) veteran LK Advani hinting at an early election on Wednesday, thereby nullifying the prospects of economic reforms any further by the Congress-led UPA government.
The BSE Sensex was down 291.94 points, or 1.55 percent and settled at 18,509.70 points, its lowest closing level since November 23, 2012. The index slumped 327.79 points at the day's low in late trade. The CNX Nifty at NSE was down 98.15 points, or 1.73 percent and closed at 5,574.75 points, its lowest closing level from November 20, 2012.
Sentiments were also dampened due to heavy selling by exchange traded funds (ETFs) in the cash and futures market segments; data showing that foreign funds too remained net sellers of Indian stocks on Wednesday as they sold shares worth a net Rs 368.39 crore on the previous day. This should be viewed in macro perspective as FIIs have invested over $10 billion this year and have been the biggest factor in keeping the markets buoyant despite sluggish economic growth.
India Infoline's Head of Research Amar Ambani said: “Slowdown in China and fall in commodity prices are among the major concerns for the Indian markets.
The political uncertainty will continue to impact market moves and with talks of an early election, market may turn cautious in the near term. Upcoming Q4 results season may manage to bring in some cheer with individual companies delivering good quarterly figures.”