The stock market may see a few days of recovery before falling again, said Sandeep Raina, executive vice president, research, Nuvama Professional Clients Group. "While it is not a panic situation, we may still witness high volatility, which can bring the Nifty down to 18,000 over 3-4 months," said Raina. "But that downside will be very slow."
Sustained rise in US bond yields in anticipation of further rates and uncertain geopolitical environment have been the main contributing factors for FII offloading Indian shares. The selling was seen in financials, power, and IT, but they continued to buy capital goods and automobiles. Analysts said the Indian market continues to exhibit resilience even amid many challenges and that investors may turn optimistic in the near future.
Market experts that ET spoke to believe that long term investors need to focus on the India growth story rather than feeling concerned over the FPI selling, which has more to do with global geopolitical issues
Indian equity markets sank in sloppy action last week with persistent selling by overseas investors, triggered by a spike in US bond yields and a rising US dollar index
FPIs continue to be buyers in financials, capital goods and financials and also in IT selectively. A significant trend in the market is that FPI selling is countered by strong DII buying, he added.