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Markets take a beating as FIIs go on selling spree

Global concerns,domestic political uncertainty spook investors

Written by Sandeep Singh | Mumbai | Published: April 6, 2013 3:08:16 am

The BSE Sensex fell for the third straight trading session taking the aggregate fall over the three sessions at 590.7 points or 3.1 per cent as foreign institutional investors remained net sellers in the capital market for the fourth day following global concerns and uncertainty on the domestic political front.

The Sensex fell by 59 points or 0.3 per cent to close at over four month low of 18,450 on Friday and the broader Nifty at the National Stock Exchange fell by 21 points or 0.4 per cent to close the day at 5,553.2. The total fall at Nifty over the last three days was 195 points or 3.4 per cent.

While challenges on current account deficit and fiscal deficit continue to prevail,a touch of political uncertainty has led the investors to move out of the market. There are global concerns that have added to the worry,with crisis continuing in Cyprus and growing tensions between North and South Korea.

The FIIs,who invested strongly between December 2012 and March 2013 and pumped in a net amount of Rs 80,709 crore that proved instrumental in the sustained rise in the bourses during the period,have suddenly turned negative. They have been net sellers over the last four trading sessions.

According to the data available at the stock exchanges,the FIIs sold a net of Rs 203 crore on Friday,taking the total selling over the last four days at Rs 825 crore.

Experts say that no investor wants to stay in the market when the uncertainty is increasing and that has led to investors moving out of the market. “There have been a lot of noise over the last few days both on the global front and in India. In such an environment people take the money off the table,” said Nandkumar Surti,MD and CEO,JP Morgan AMC.

The downward trend however is not expected to extend for long as experts feel the FII money will come again on account of high liquidity in the global market and low interest rates in those economies.

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