Benchmark stock market indices opened in red on Monday after days of gains as investors booked some profit. The decline in early trade was also due to a dip in IT, private banking, and FMCG stocks.
The S&P BSE Sensex was down by 252.57 points to 83,686.14, while the NSE Nifty50 was down by 50.40 points to 25,671.70 as of 9:28 am.
Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said that gains of 3,860 points on the Sensex and 1,157 points on the Nifty in October didn’t help the market scale up to a new record high.
“Profit booking and FIIs again turning sellers prevented continuation of the rally to record highs. Since the FII strategy of selling in India on rallies and moving money to other better performing markets have paid them rich dividends, they can be expected to continue the same strategy now also. A change in this scenario will happen only when we have leading indicators suggesting a smart turnaround in India’s corporate earnings,” he added.
The Trump – Xi Jinping summit delivered only a temporary truce in the US-China trade war, not a trade deal. The implications of this on a possible US-India trade deal remain to be seen.
A significant trend in the industry is the sustained demand for automobiles, particularly small cars, which is turning out to be better than the optimistic expectations. Auto shares will remain resilient.