NSE top index at 10-year low as US-China trade row hits stocks

The stock exchange’s main index has dropped to a 10-year low foreign investors flee amid turmoil in global markets and profit-taking on banking stocks, analysts said.

On Tuesday, the NSE-20 Share Index closed at 2,552.19 points, down from 2,575.73 a day earlier. It last was near this level on March 12, 2009, when it closed at 2,453.36.

“I would attribute it to a general market issue whereby we have had foreign investor outflows. There have been net foreign investor outflows, while local participation has reduced,” said Sarah Wanga, head of research at AIB Capital.

The decline had been gradual, starting around October, Wanga said.

“Banks in general are doing well. However, insurance companies have been struggling and also manufacturing, in particular construction, that would be (cement manufacturer) Bamburi,” she said.

Data from regulator Capital Markets Authority showed that in the second quarter of this year, foreign investors accounted for an average 69.62 per cent of the market turnover, down from 76.96 per cent in the previous quarter and 70.80 per cent in the second quarter of 2018.