Sensex, Nifty suffer sharp fall for third day in a row

NEW DELHI: Dragged by weak global sentiment after Fitch’s downgrade of US credit rating, the BSE benchmark Sensex and Nifty fell for the third in a row.

The Sensex declined by 542.10 points to close at 65,240.68. The Nifty ended 144.90 points down at 19,381.65.
The Fitch downgrade directly impacts the foundation of the global financial system, given that US Treasuries are renowned for being among the safest investment options. The agency justified its decision based on various factors, including frequent standoffs in Congress concerning potential government defaults.

Interestingly, the selling in Indian markets continued even as US investment bank Morgan Stanley upgraded its view on Indian markets to “overweight” from “equal weight”.
According to a note from the brokerage on Wednesday, India has now climbed to the top spot as the most-preferred market among emerging markets (EMs), surging from the sixth position. This rise is attributed to several factors, including supportive foreign inflows, macroeconomic stability, and a positive earnings outlook. Morgan Stanley analysts pointed out a consistent and superior trend in earnings per share (EPS) growth compared to other emerging markets over the economic cycle. Additionally, the country’s young demographic profile is driving increased equity inflows.
Interestingly, the situation in Indian markets stands in stark contrast to that of China. While India is experiencing growth and favorable conditions, China may be reaching the end of a prosperous period, with the country potentially at the beginning of a long-wave boom.
According to a note from the brokerage on Wednesday, India has now climbed to the top spot as the most-preferred market among emerging markets (EMs), surging from the sixth position. This rise is attributed to several factors, including supportive foreign inflows, macroeconomic stability, and a positive earnings outlook. Morgan Stanley analysts pointed out a consistent and superior trend in earnings per share (EPS) growth compared to other emerging markets over the economic cycle. Additionally, the country’s young demographic profile is driving increased equity inflows.
In terms of sectors, the brokerage maintains a bullish stance on financials, consumer discretionary, and industrial segments in India. Moreover, it has given an “add” rating to Larsen & Toubro and Maruti Suzuki India on its Asia Pacific focus and Global Emerging Markets lists.
Interestingly, the situation in Indian markets stands in stark contrast to that of China. While India is experiencing growth and favorable conditions, China may be reaching the end of a prosperous period, with the country potentially at the beginning of a long-wave boom.
Investors’ wealth had eroded by Rs 3.46 lakh crore on Wednesday after equity markets took a sharp tumble amid weak global trends and foreign fund outflows.
(With inputs from agencies)