Indian equities extended their losses on Tuesday, with the Nifty 50 falling below 22,600 as rising US Treasury yields and higher crude oil prices weighed on sentiment. The Nifty50 dropped 194 points, or 0.85%, while the Sensex fell 638 points, or 0.88%, to 72,133.04 as of 10:19 a.m. Pharma was the only sectoral index in the green. Media and Financial Services led the declines, while Nifty Bank traded below its three-month low.
With investors facing a broad market decline, with all but one sectoral index lower in morning trade, here's what market experts have to say:
'Do Not Panic'
Pankaj Murarka, chief investment officer at Renaissance Investment Managers, told NDTV Profit that macroeconomic headwinds, including higher crude prices, were a concern for the market. He expects the Nifty's losses to moderate by year-end, although he said he would watch how markets move after the US midterm elections against a backdrop of weakness in the US economy.
Murarka urged investors not to panic. India's medium- and long-term fundamentals remain strong, he said, and the market offers many "durable growth" stories. He expects better buying opportunities over the next few weeks and said Indian equities could become attractive next year.
Broad indices may not capture the opportunities available, Murarka said. Investors need to identify individual companies and stocks, with the balance of potential risk and return starting to move in their favour.
Large Caps Stocks To Struggle
Gurmeet Chadha, managing partner and chief investment officer at Complete Circle, said margin calls had been triggered and brokers were asking clients for additional margin. Foreign institutional investors have not made money in dollar terms in recent years, he said.
Chadha expects large-cap stocks to continue struggling and said investors would be better served by selecting individual stocks. Larger companies were not taking enough risks, he said. Chadha said that the management teams he had spoken to, had pointed to supply-chain problems rather than weak demand as the more pressing issue.
Market Could Undergo Major Revision
Pankaj Tibrewal Founder & CIO IKIGAI Asset Manager told NDTV Profit that the market could undergo a major revision, with a turnaround potentially taking three to four years. Indian companies have healthy balance sheets and cash flows, he said, though he sees signs of fatigue among domestic investors. Tibrewal said the market was entering a new earnings momentum cycle. Its performance would improve if that momentum proved strong, he said.
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