The Indian stock market could be bottoming out after the sharp correction seen in the last few weeks, believes Christopher Wood, global head of equity strategy at Jefferies.
“There is a reasonable possibility that the Indian stock market is bottoming out after a correction, which has been primarily in the more expensive mid-cap stocks. A positive, as regards the private banks, is that liquidity pressures have reduced with deposits and loans now growing atthe same rate showing a decline in funding pressures,” Wood wrote in his recent weekly note to investors, GREED & fear.
From a 52-week high of 85,978 levels hit on September 27, 2024, the S&P BSE Sensex has slipped nearly 6,200 points, or around 7.1 per cent till date. The 30-share index had slipped into ‘correction’ mode with a fall of over 10 per cent from this peak level before recovering some ground.
The fall in the mid-and smallcap indices, data shows, was steeper. The Nifty MidCap 100 Index had declined by 12 per cent from the peak on September 24 to a recent low on November 12, and has since risen by 5 per cent. While the Nifty Index was down 11.5 per cent from the peak on September 27 to a recent low on November 21 and has since risen by 2.8 per cent, data shows.
Foreigners, meanwhile, have sold $12.5 billion worth of Indian equities in the past two months, but that selling has been absorbed by continuing strong domestic inflows.