Rising tensions between Israel and Iran and shifts in foreign portfolio investor activity are pressuring Indian stocks, with benchmark indices Nifty 50 and Sensex declining for sixth consecutive trading session, today.
On Monday, Indian stocks fell for the sixth time in a row, highlighting investor concerns about the impact of global geopolitical tensions, particularly between Iran and Israel. Foreign institutional investors also continued to sell.
The Nifty 50 and Sensex both closed today’s session in the red, down more than 0.80% and reaching their lowest levels since mid-August. The Nifty 50 and Sensex have retreated about 7% and 6%, respectively, since their recent peaks.
DIIs are increasingly emerging as powerful participants in the market, with deeper financial resources than their international counterparts.
Despite the inflated values brought about by the consistent inflows, economists think this trend is likely to continue in the near future. Mutual funds are forced to invest incoming funds regardless of valuation issues or their level of conviction as long as ordinary investors keep flooding the market, which lessens the market’s sensitivity to tensions in the world economy.