Mumbai– The Indian stock market dropped for the second consecutive day on Monday, with the BSE Sensex losing over 1,000 points in two sessions.
The stocks tumbled amid weak global cues and profit booking by investors, analysts said.
“Indian equity benchmark indices witnessed profit taking for the second consecutive day on January 18 on the back of soft global markets,” said Deepak Jasani, Head of Retail Research at HDFC Securities.
He noted that shares fell on Monday across most Asian markets following a fall on Wall Street, but benchmarks in Hong Kong and Shanghai rose after data showed the Chinese economy grew a solid 2.3 per cent in 2020.
European equity markets struggled for direction on Monday as strong economic data from China competed with concerns over a double-dip recession in the UK and the eurozone.
Siddhartha Khemka, Head of Retail Research, Motilal Oswal Financial Services Ltd, said that global cues were weak as soaring Covid-19 cases offset investor hopes of a quick economic recovery, while the Chinese economy posted a better-than-expected rebound in the fourth quarter of 2020.
“Going ahead, market would be volatile given the ongoing earning season and the weak global cues. Run-up to the Budget expectations would also add to the volatility,” he said.
“The valuations too are stretched as the Nifty is trading at 22x one-year forward P/E compared to its Long term average of 19x. We would advise investors to take the opportunity to accumulate quality stocks on dips. Traders on the other hand should book profits intermittently and be stock selective,” Khemka added.
On Monday, the Nifty50 on the National Stock Exchange (NSE) closed at 14,281.30, lower by 152.40 points or 1.06 per cent from its previous close of 14,433.70 points.
Sensex closed at 48,564.27, lower by 470.40 points or 0.96 per cent from its previous close of 49,034.67 points.
On Friday, the index had dropped nearly 550 points.
The top losers on the Sensex on Monday were Tata Steel, ONGC and Sun Pharmaceuticals, while, Reliance Industries, Titan Company, HDFC Bank and ITC were the only gainers on the Sensex. (IANS)