Sensex falls 1.9% as FIIs eye exit

Banking stocks, RIL lead losses as investors turn wary ahead of Budget on Feb. 1

Benchmark stock indices fell sharply on Wednesday, extending their losses to a fourth straight session, as foreign funds turned net sellers and domestic investors opted for caution ahead of the Union Budget due to be presented on Feb. 1.

Analysts expect the correction to continue till the presentation of the Budget.

The S&P BSE Sensex tumbled 938 points, or 1.94%, to 47,410 led by banking stocks and Reliance Industries. Top losers included Axis Bank, Titan, IndusInd Bank, HDFC Bank and Dr. Reddy’s. RIL, which has the highest weight in the index, slid 2.3% as Amazon pursues challenges to its deal to acquire the Future Group’s retail assets.

“The fall was across the board,” said Deven Choksey, MD, KR Choksey Shares & Securities.

“Most stocks tanked 2% on average. Ahead of the Budget, there is a little bit of reluctance and the market does not want rollover [of futures positions],” he added.

The Nifty 50 index fell 271 points, or 1.91%, to 13,968.

Net sellers

Foreign funds were net sellers of ₹662 crore of equities on the bourses on Monday, NSDL data show.

“Several factors like negative foreign flows combined with not so encouraging earnings’ announcements dented sentiment,” said Ajit Mishra, VP, research, Religare Broking.

“Caution ahead of the Union Budget and scheduled derivatives expiry also added to the pressure. In line with the benchmark, all the other indices, barring FMCG, ended with losses wherein metal, realty and auto were the top losers,” Mr. Mishra said.

He said he expects the Nifty to test 13,700.

“This decline of Nifty by 800 points from the top ought to be seen as a healthy correction and an interim consolidation phase before the markets begin the next leg of movement,” said Pankaj Pandey, head of research, ICICI Direct.

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