Nature’s Fury: Cyclone Freddy wreaks havoc in Malawi, Mozambique – See Photos1/7 An unrelenting Cyclone Freddy that is currently battering southern Africa has killed around 100 people in Malawi and Mozambique since it struck the continent for a second time on Saturday night. (Photo: Reuters)2/7 Mozambique and Malawi on Monday were counting the cost of Tropical Storm Freddy, which killed more than 60 people, injured scores and left a trail of destruction. (Photo: Reuters) Freddy recorded more energy over its lifetime than an entire typical U.S. hurricane season. (Photo: Reuters) Freddy made landfall in the seaport of Quelimane in Mozambique on Saturday. (Photo: Reuters) Freddy first developed near Australia in early February and traveled across the entire southern Indian Ocean. (Photo: AP) The U.N.’s weather agency has convened an expert panel to determine whether it has broken the record set by Hurricane John in 1994 of 31 days. (Photo: Reuters) Freddy is one of the strongest storms ever recorded in the southern hemisphere. (Photo: Reuters)
However, he believes that the impact on the Indian market is going to be temporary since there could be some short-term impact on flows into Indian equity markets. But since the Indian economy is on a strong wicket and will continue to remain resilient.
“Improved fiscal situation, controlled current deficit, stable interest scenario combined with good corporate earnings should lead to limited impact on the Indian bond market and equity market too,” he added.
The midcap and smallcap indices took a bigger knock with the BSE MidCap fell 2.51%, while BSE SmallCap index dived 4.18%. According to Amnish Aggarwal, head, research, Prabhudas Lilladher, the valuations were already high and some correction was expected. “If the situation sustains as it is then further correction can’t be ruled out,” Aggarwal said.
Telecommunication and industrials indices were the top laggards with BSE Telecommunication declining 3.82%, followed by BSE Industrials falling 3.26%. JSW Steel (-2.99%), Tata Steel (-2.52%) and Tata Consultancy Services (-2.44%) were the top losers of Sensex.
Surprisingly, both foreign portfolio investors and domestic institutional investors were net buyers today. While, FPIs net bought shares worth Rs 252.25 crore, DIIs have purchased shares worth Rs 1,111.84 crore, as per provisional data from exchanges.
Calling this a “normal phenomena” Pankaj Pandey, head, research, ICICI Direct said, “I will not really give too much weight to a single day buying figure. Amid concerns of elevated interest rate and geopolitical tensions, in a typical market cycle, 8-10% correction is possible at any point in time.”
The brunt of geopolitical conflict, elevated interest rates and rising crude oil prices was also felt by other Asian- Pacific markets. Jakarta Composite Index lost 1.57% followed by Shanghai Composite Index and PSEi, which fell 1.47% and 0.89%, respectively. Nikkei and KOSPI declined 0.83% and 0.76%.