Benchmark stock market indices opened lower on Monday, starting the week on a low as investor sentiment remained dampened due to continuous FII outflow, falling rupee, and uncertainty over trade deal with US.
The S&P BSE Sensex was down by 49.63 points to 85,662.74, while the NSE Nifty50 was down by 29.85 points to 26,156.60 as of 9:26 am.
Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said that sustained depreciation of the rupee has been forcing FIIs to sell in the market continuously.
“Another major factor is the spike in Japanese bond yields which can trigger another bout of reversal of yen carry trade. In brief, there is potential for high volatility,” he added.
Emerging positive and negative news have the potential to keep the market volatile in the near-term. Robust economic growth and indications of earnings growth revival are supportive of markets. The massive fiscal and monetary stimulus to the economy this year has contributed to sharp revival in GDP growth as evidenced by the 8.2% Q2 GDP growth print, and RBI’s upward revision of FY 26 GDP growth to 7.3% augurs well for the market. Low GDP deflator, consequent to low inflation, has impacted nominal GDP growth and corporate earnings growth. But from the leading indicators it is clear that about 15% earnings growth is achievable in FY 27. This is positive for the market. However, there are strong negatives, too, which can impact the market.
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