Mumbai, Aug 11 (ANI): Financial Analyst Sunil Shah on Thursday said that the volatility in the markets is due to the global turmoil and the recent rumours of France losing its credit rating.
"Late in the evening when US markets opened, they were down and they gave a negative closing. The reason is obviously, the European debt crisis and there are some banks in France that are announcing that they are in serious troubles," said Shah.
"We have heard President Sarkozy's (French President) comments, asking his finance minister to address the issues as soon as possible. So, nervousness is still prevailing (in the Indian markets)," he added.
Indian shares fell half a percent early on Thursday, giving up Wednesday's gains and tracking a fall in Asian peers, as investors continued to worry about Europe's financial crisis.
Investors turned bearish after another plunge on the Wall Street triggered by concerns that France might lose its AAA rating.
However, the fall was less than many global markets, indicating that FIIs were not in a hurry to sell-off Indian equities. The Sensex closed 71 points lower at 17,059 and the Nifty declined 22.70 points to 5,138.
Shah further said that certain sectors, which were exposed to the international markets, bore the brunt of the global economic turmoil.
"Those companies, like IT sector and those with global exposure, they have taken serious beating. So, even today pharmaceutical, FMCG (fast Moving Consumer Goods) and companies and industries with the local theme, they are doing well and the companies with global theme, who have larger exposure to overseas markets, they are still not well," he said.
However, on Wednesday real estate, auto and IT stocks saw some fresh buying, while oil and gas stocks were under selling pressure.
India's Automaker Tata Motors will be watched as the company reports quarterly results later in the day. Shares in Piramal Healthcare will also be in focus after it agreed to buy 5.5 percent stake in Vodafone's India business.
Goldman Sachs said Indian equity markets may moderately outperform the Asian region on a six months basis as the price to earnings valuations for Morgan Stanley Capital International (MSCI) India index are just at 14 times forward earnings. (ANI)
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