Sensex, Nifty Set For Big Selloff Amid Slide In Global Equities

The BSE Sensex and the broader Nifty are set for gap down start on Monday amid a global selloff in equities. The Nifty futures trading on Singapore Exchange (SGX) were down 142 points or 1.6 per cent at 8,766 as of 08.10 a.m., indicating a big selloff in domestic markets today.

Traders are likely to take cue from Asian markets, which traded with deep cuts. MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.9 per cent, pulling away from a 13-month peak. It was the largest daily drop since the frenzy caused by Britain's vote in late June to leave the European Union.

Global investors have been rattled by rising bond yields and talk that the Federal Reserve might be serious about lifting US interest rates as early as next week. The Dow shed 2.13 per cent on Friday, while the S&P 500 lost 2.45 per cent and the Nasdaq 2.54 per cent.

According to market analysts, Indian equities are ripe for a big correction because of the sharp rally seen over the last few weeks. Both the Sensex and Nifty are trading near record highs, following the breakout from a narrow range late last month.

"We feel the correction in September can be steeper than most expect... The Nifty has rallied almost non-stop from 7,940 on June 25 to near 9,000 on September 8, returning over 13 per cent," said Sanjeev Bhasin of IIFL.

Banking and IT stocks are likely to be under pressure today, traders added. Banking stocks have run up sharply, with many PSU lenders hitting their 52-week highs. IT stocks have seen huge selloff after many companies forecast tepid earnings growth in view of weak global demand.