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Indian equities lost value of over Rs 6 lakh crore on Monday, although analysts said the fall is not a cause for worry.
The uncertainty around the US presidential elections, weak earnings growth of Indian companies in second quarter and relentless pullout by foreign investors have hit local stocks.
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Deepak Shenoy highlights the impact of abnormal muhurat trading prices and the absence of FIIs. "If you count from the day before, the stocks are down less than a percent so it is not meaningful to speak about."
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Pratik Agarwal of Motilal Oswal said as there is decline in interest for arbitrage funds, reduced market absorption for large trades leads to lower premiums during high selling periods. This shift diminishes arbitrage returns, making the investment space less appealing.
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While the benchmark Nifty is down 8%-9% from peak, the Small Cap index is hardly down 6% from its 52-week high, according to Mihir Vora of TRUST Mutual Fund.
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