Indian stocks back in green after Tuesday’s bloodbath

New Delhi: Indian stocks were in the green Wednesday morning, after a bloodbath during the previous session — Sensex fell over 1,000 points — due to a host of reasons including high valuations, foreign portfolio investors lately pulling out funds from India, and a mild profit booking.

Yesterday’s slump wiped off lakhs of crores from investors’ kitty.

At 10.06 am, the benchmark Sensex and Nifty were 0.5-0.6 per cent higher at 70,759 points and 21,368 points, respectively. Among the widely-tracked Nifty 50 stocks, 38 advanced and the rest 12 declined.

Among them, Hindalco, IndusInd, Dr Reddys, SBI, and Coal India were the top five gainers, while Axis Bank, Asian Paints, Hero Motocorp, M&M, and Eicher Motors were the top five losers, NSE data showed.

“The trigger for the correction came mainly from the sustained selling by FIIs who have sold equity worth Rs 27830 crores during the last 5 days,” said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, commenting on yesterday’s sharp slump.

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“Some news and rumours also contributed to the selling in the market. There is news that SEBI is tightening the ultimate beneficiary norms for FPIs starting February 1st. This might have triggered some FPI selling.”

Vijayakumar advised investors to wait for the market to stabilise. “Safety now is in fairly priced large caps.”

On Tuesday, shares of Zee Entertainment Enterprises tanked around 30 per cent to hit the lower circuit, a day after the cancellation of the merger deal with Sony Pictures. The lower circuit is the lower possible price that the stock of a firm can trade at on that particular session. This morning however it was trading marginally higher.

On Monday, Sony Pictures terminated the USD 10-billion merger deal with Zee Entertainment Enterprises.

“On the domestic front, this week is a truncated week with just three trading days. Given weak global cues and mixed set of earnings released so far, the market is likely to consolidate and may drop a little further till the next set of fresh positive triggers,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services.