Market Review

Trump’s victory demonetises equity positions Market Review

Mumbai, Nov 12 The surprise victory of Republican Donald Trump in the US Presidential election, along with a sudden demonetisation of Rs 500 and Rs 1,000 notes, spooked investors into a selling spree and plunged the key Indian equity markets by more than 1.50 per cent during the just concluded week.

Besides, a weak rupee and lower crude oil prices, combined with the political and economic backlash of the demonetisation move and outflow of foreign funds, dragged the equity markets lower.

The 30-scrip sensitive index (Sensex) of the BSE closed the week’s trade with a loss of 455.33 points or 1.67 per cent to 26,818.82 points.

Similarly, the 51-scrip Nifty of the National Stock Exchange (NSE) receded by 137.45 points or 1.63 per cent to 8,296.30 points.Global stock markets have had a torrid Wednesday given the jitteriness over the outcome of the US election,” D.K. Aggarwal, Chairman and Managing Director, SMC Investments and Advisors, told IANS.

“The victory of Donald Trump took market participants around the world by surprise and sent markets into a tailspin. However, the markets recovered after Trump sounded more presidential in his (post-victory) address to Americans.”

Aggarwal added that the domestic markets tumbled on the Modi government’s move to curb black money.Another major theme last week was the heightened expectations of a possible rate-hike in the US.

A hike can potentially lead foreign portfolio investors (FPI) and funds away from emerging markets such as India. It is also expected to dent the business margins of corporates as access to capital from the US will become more expensive.

“Global markets’ sentiment is negative due to the strong possibility of a rate-hike by the Federal Reserve in December,” stock brokerage firm Angel Broking said in a commentary to IANS.

In addition, profit booking ahead of a long weekend, rupee depreciation and foreign funds outflow extended the falls.

The Indian rupee depreciated by 56 paise to 67.26 against a US dollar from last week’s close of 66.70, as the dollar index gained worldwide.