Nifty fell from its record high of 12,103 (on June 3) to psychological 11,000-mark on July 31 plunging 9 percent in a span of two months, dragged majorly by auto, banking & financials, energy, infra and metals stocks.

Proposal to increase the surcharge on super rich was the main reason behind such a fall. A slowing economy, a slump in demand in certain sectors and geopolitical tensions didn't help the market sentiment either.

The broader market was also hit very hard, falling more than benchmark indices in the period. In the last two months, Nifty Midcap index plunged more than 13 percent and Smallcap index corrected 16 percent.

Over 300 Nifty500 stocks fell in double digits in the period. Top losers among them were Cox & Kings, Jet Airways, Sintex Plastics, Indiabulls Integrated Services, Reliance Capital, Jain Irrigation Systems, Reliance Power, Dewan Housing Finance Corporation, Reliance Infrastructure, PC Jeweller, Reliance Home Finance, Jaiprakash Associates, Vodafone Idea, etc. that tanked between 50-90 percent.

The sharp correction in most of above stocks is because of high debt and corporate governance concerns.

Among Nifty components, 45 stocks including Yes Bank, Indiabulls Housing Finance, GAIL India, Tata Motors, Coal India, Maruti Suzuki India, Indian Oil Corporation, Hero Motocorp, IndusInd Bank, Bharat Petroleum Corporation, etc. slipped into the red, falling 20-42 percent.

However, there were certain outliers as well that gained despite a sinking market. About 40 stocks in Nifty500 index gained 1-22 percent. They include Torrent Power, Adani Power, HDFC AMC, SBI Life, Thermax, MAS Financial Services, HDFC Life, Avenue Supermarts, Torrent Pharma, etc.

Foreign investors in July sold more than Rs 11,000 crore worth of shares after a denial to tweak surcharge on super rich by the government.

"Indian equities are passing through a tough phase, reflecting factors like weak economic growth and a weak corporate earnings growth environment. However this has been known for a while, so are fears of a global slowdown & a weak monsoon. The more recent slowdown, I believe, is on account of disappointment among FIIs over tax proposals," Rajiv Singh, CEO, Karvy Stock Broking told Moneycontrol.

He said in the near term, a rate cut by the Fed should be helpful for global equities, and boost sentiment for all emerging markets including India.

Also read: Fed cuts rates, signals it may not need to do more

Ajit Mishra, Vice President - Research at Religare Broking also said stability in global markets led by rising optimism of US-China trade deal and Fed dovish statements has provided the necessary support for Indian markets.

But he feels Nifty may see a further fall but ruled out a sharp plunge of 5-10 percent in coming months.

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