Sensex slips below 24,000-level

MUMBAI: The Indian equity markets on Thursday joined scores of other leading emerging and developed markets to enter the bear market territory plunging over 20 per cent from their 2015 highs as a rout in global crude oil prices and growing concerns over China’s economic growth triggered widespread risk aversion.

The Sensex slipped below its psychological 24,000-level to close at 23,962.21, down 99.83 points. The index is now down 20.19 per cent down from its historic high of 30,024.74 hit on March 4, 2015. The Nifty closed the day at 7,276.80, down over 19 per cent from its all time high.

France, Germany, UK, Japan, China, the Philip-pines, Taiwan, Thailand, Brazil and Mexico are some of the other markets, which have slipped into bear market territory recently.

The rupee, meanwhile, has hit 29-month low of 68.02 against the dollar, inching closer to the all-time low of 68.80 witne-ssed on August 28, 2013.

While there is a near consensus view that the markets are going to remain under pressure in the near term, market participants are divided on whether the Indian markets are in the initial stage of a long-term bearish phase.

One section views this as a knee-jerk reaction to global events. On the other hand, with weakening currencies and falling commodity prices including oil, another section of market participants believes this is an early symptom of a long term bearish phase.

“We are seeing the early symptoms of a bear market. Most of the currencies are weakening. The continued slide in global crude oil prices are going to hurt most of the oil producing countries. So far the crisis was restricted to commodity and oil exploration firms, as they have invested billions of dollars in various projects. This is now going to hit the banking sector, which will then extend to other sectors as well. I am very bearish on the markets at the moment and I feel that the domestic equities would remain under pressure for at least another 6-12 months,” said Alex Mathews, head of research at Geojit BNP Paribas Financial Services.

However, Dinesh Thakkar, chairman and managing director of Angel Broking, believes that the Indian markets are yet to see the impact of falling interest rates and lower inflation on corporate balance sheets.

“The markets are likely to remain under pressure for another one or two quarters. But profit growth may stabilise and pick up by the second quarter of FY17. So investors should look at investing in the market in a staggered manner,” he added.