Indian markets struggle to recover from Brexit hangover

Mumbai, June 27 (IANS) Taking cues from their Asian peers, key Indian equity indices were on Monday trading flat while trying to recover from the hangover of last week’s Brexit vote.

Heavy selling pressure was particularly witnessed in information technology and technology stocks.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 26,347.81 points, was ruling at 26,378.59 points — down 19.12, or 0.07 per cent — at around 2:30 p.m., against the previous close at 26,397.71 points.

It touched a high of 26,493.51 points and a low of 26,262.72 points during the intra-day trade.

In contrast, the BSE market breadth was tilted in favour of the bulls — with 1,766 advances and 665 declines.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) inched down to 8,087.50 — lower by 1.10 points or 0.01 per cent.

On Friday, the equity markets plummetted on the back of negative global cues and a sharp drop in rupee’s value. The barometer index had plunged by 604.51 points or 2.24 per cent, while the NSE Nifty dropped by 181.85 points or 2.20 per cent.

Initially on Monday, the key indices opened on a flat note — marginally in the red — as investors’ sentiments remained weak on account of the volatility caused in the global markets due to Britain’s vote to exit the EU.

This had also resulted in a sharp drop in the rupee’s value and dried up foreign fund inflows.

However, the Indian markets gained some momentum shortly after to trade in the green as the Asian markets, especially the Nikkei, showed a considerable recovery by shrugging off the global selloff stimulated by the Brexit.

The rupee, after a major fall of 71 paise on Friday, managed to wipe out its losses and helped the equity markets to support its weakened sentiments. Hopes of healthy monsoon have also contributed to the behaviour of the markets.

The investors were still seen to be cautious, ahead of the US trade data to be released later on Monday, and GDP and consumer confidence data to be released a day later. The Indian markets are also expected to remain cautious ahead of some major industrial data to be released later during the week.

“The Indian markets are taking cues from the global markets today. The Asian markets have shown recovery, especially the Chinese and Japanese markets. The Shanghai is up 1.44 per cent and the Nikkei is up 2.39 per cent,” Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.

“Basically, the market behaviour in the time-being is the follow-up of the Brexit that happened last week. After a sharp decline on Friday, the rupee is also showing some strengthening,” James added.



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