Shillong, September 25: On Monday, the BSE Sensex slipped below the 66,000 mark, with a decline of 163 points, reaching 65,845 points. Notably, stocks like Infosys, L&T, Indusind Bank, Wipro, and TCS were down by more than 1 percent.
As per IANS, V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, pointed out that sustained Foreign Institutional Investor (FII) selling has been putting pressure on the market in recent days. In the cash market, FIIs have sold Rs 18,260 crore worth of shares so far this month.
He highlighted that because valuations in the market still appear elevated even after a recent pullback and US bond yields are attractive, with the US 10-year bond yield at around 4.46 percent, FIIs are likely to continue selling as long as this trend persists. Expecting FIIs to engage in aggressive buying is irrational under these circumstances, particularly with the US 10-year bond yield and the dollar index both remaining high.
Despite the recent correction, the Nifty is trading at around 20 times the FY 24 earnings, making India one of the most expensive markets globally.
Vijayakumar also noted that FII selling can present an opportunity for domestic investors who are not as affected by the dollar index and US bond yields. When high-quality stocks in sectors such as banking and capital goods experience declines, these stocks can be acquired for potentially substantial long-term gains.
He also mentioned that in the US market, the S&P 500 has fallen by 4.2 percent so far in September. If this weakness in the S&P persists, it could have an impact on Indian markets as well. Therefore, investors may choose to adopt a wait-and-watch approach until clearer trends emerge.