Indian shares fell on Wednesday witnessing a two-month low as risk factors including global recession, falling Indian rupee and not inclusion of Indian bonds in foreign exchanges continue weigh down sentiments.
The BSE Sensex fell to 56,891.95 in the morning and recovered to 56,953.56 or 153.96 points down (0.27%) as of 1:44 pm. Nifty fell 0.4% to a day low of 16,940 and slightly recovered to 16,959.25 or 48.15 points down (0.28%) today.
Asian share markets slid on Wednesday amid Fed fears and global recession forcing investors into buying the safe-haven dollar.
With rising interest rates and bond yields, the investment barrier for equities has risen, Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services, told Reuters. The fear of recession due to very high interest rates is adding pressure, he noted.
"While India has been sharply outperforming (global markets), it is not immune to global risks and now there is a bit of catching up, with foreign investors turning huge sellers," Khemka said.
Foreign institutional investors sold a net 28.24 billion Indian rupees ($345.63 million) of Indian equities on Tuesday, while domestic investors purchased 35.05 billion rupees shares, as per provisional data available with the National Stock Exchange, reports Reuters.
"Indian equities have shown resilience relative to most of advanced and emerging market peers ... Notably, retail participation continues to increase," State Bank of India's economic research department said in a note.