Stock indices slide 1.3% on sustained selling

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PSU banks hold well on recap hopes.

The Economic Survey failed to trigger a rebound in the markets which on Friday slumped by more than 1% on sustained selling pressure. The S&P BSE Sensex tanked 559 points or 1.26% to 46,286 while the NSE Nifty 50 lost 183 points or 1.32% to 13,635.

“The equity market remained highly volatile throughout the trading session,” said Dr. Joseph Thomas, head of Research, Emkay Wealth Management.

“Speculations about likely public sector bank recapitalisation based on the observations in the Economic Survey helped PSU banks to hold well while the broader market gradually declined.”

“The Survey argues for more countercyclical measures from the government,” said Dr. V.K. Vijayakumar, chief investment strategist, Geojit Financial Services. “If the government goes along with the suggestions from the Survey, more government spending, particularly on infrastructure can be expected.”

“GDP growth rate of 11% for FY22 is realistic. The Survey also bats for accelerated privatisation…, in tune with the Atmanibhar package announced in May. If the focus of the Survey gets reflected in the Budget, we are likely to get a reformist Budget.”

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