Nifty 50, Sensex and the Nifty Bank index fell sharply last week. Sensex and Nifty were down about 2.6 per cent each. Nifty Bank index fell 1.9 per cent. We had expected the benchmark indices to reverse higher after testing their key support. That view has gone wrong. The short-term picture is weak. However, there is no major change in the long-term outlook. The fall last week is just delaying the rally that we have been expecting.

The US increasing the H-1B visa fee coupled with strong foreign money outflow weighed on the markets last week. The Foreign Portfolio Investors (FPIs) pulled out about $1 billion from the Indian equity segment last week.

Among the sectors, the BSE IT and the BSE Realty indices were beaten down the most. They were down 7.3 per cent and 6.1 per cent respectively

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