Jagdish Malkani, Member, NSE, believes the market fall could be on account of basket selling, with ETFs being the most active among the foreign institutional investors (FII).
A late bear-attack dragged the market deep in red in the last half-an-hour of trade on Wednesday. Equity benchmarks shed more than 1 percent intraday with the broader markets falling in step. Technology, pharma, auto, capital goods and private banking & financials stocks saw selling pressure. The Sensex fell 244.75 points or 0.84 percent to 28799.69 and the Nifty was down 83.80 points or 0.95 percent to 8750.20.
The broader markets also felt the brunt as the BSE Midcap index snapped 10-day winning streak, down 0.5 percent and Smallcap dropped for the first time in last 10 sessions, down 0.3 percent.
According to Malkani, the market has already witnessed two such clear phases in the last week of March, where a lot of sell-offs was seen, driven by domestic operators and high net worth individuals (HNI) on tax reasons. However, it started building up gradually thereafter.
“Personally I would not yet be too alarmed because by and large the global environment is benign and the news is good,” said Malkani, adding that it is psychologically a great boost to know that India’s growth rate would be higher than China’s for the next two-three years. “This is not a small compliment to the nation’s economy and as compared to Brazil, Russia and other peers, we are smelling good,” he said.
On Bank Nifty, Malkani feels there is still some steam left. According to him, the correction has been localized in the index. “It has been Kotak and YES Bank and possibly IndusInd but HDFC Bank has hardly participated, while public sector (PSU) banks till today have been out of the action,” he said.
However, Malkani believes that if the rally is to continue it will be banks again but it could be a different set. “I still think private banks will lead the way,” he added.
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