Editor’s Take: Indian markets holding back despite weak global cues, FIIs sell-off – Anil Singhvi decodes reasons

The Indian markets are not witnessing similar falls as being witnessed by their overseas peers despite incessant weak global sentiments and foreign investors’ sell-off. Zee Business Managing Editor Anil Singhvi decodes the reason behind the phenomenon and list two major reasons why benchmark indices are trading near flat instead of seeing any significant fall. 

Singhvi said the major reason for the Indian indices not seeing a larger impact of weak global cues is a low leverage position in the market. As the leverage position in the market, be it F&O or margin funding is low, the weakness in the market is also nominal, he added. 

The managing editor credited the Securities and Exchanges Board of India’s (SEBI's) peak margin rules for the current low leverage position. The idea of implementing peak margin was to avert the markets from massive falls, he said, praising the market regulator. 

Not just that the tightening at brokers and client levels also arrested the market fall resulting trade to be either flat or muted amid negative global cues and selling pressure from the Foreign Institutional Investors (FIIs). 

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According to Singhvi, the panic in the market is created only when there is an availability of easy money and also when traders take a high position for quick money.  

Besides, the local funds coming into the market from various instruments such as Mutual Funds are also helping the indices from massive decline due to the support of domestic investors.  

The FIIs long position have increased to 39 per cent from 37 per cent; Nifty PCR has slipped to 0.9 from 1.01, while the volatility index India VIX has jumped 9 per cent to 25.64, Singhvi noted. 

At around 01:10 PM, the BSE Sensex was up 45 points or 0.08 per cent to 54097, while Nifty50 was down 82 points or 0.5 per cent to 16042 levels intraday on Tuesday.