Mumbai: The BSE Sensex extended losses to more than 1% on Monday afternoon, weighed down by political uncertainty ahead of general election results this weekend.
At 12:33pm, the 30-share BSE index was down 1.1% at 11,742.64 points, with 25 stocks declining, after rising as much as 1.3% in early trade and the 50-share NSE index was down 1.3% at 3,574.10.
Sensex was choppy erasing early gains of more than 1%, as uncertainties ahead of national election results on 16 May tempered rising optimism about the global economy.
Leading financials State Bank of India, which posted 46% jump in quarterly profit on Saturday, and smaller rivals ICICI Bank, HDFC Bank were among the major gainers.
By 11am, the 30-share BSE index was up 0.05% at 11,882.96 points, after turning briefly negative, with energy giant Reliance Industries that has the heaviest weight in the index edging up 0.04%. The 50-share NSE index was down 0.4% at 3,606.60.
The benchmark, which is up about 50% from its 2009 low in early March, rose as much as 1.3% in early deals, but fell back as investors were concerned about the poll results throwing up a unstable coalition.
Thirteen of the index components rose, while in the broader section gainers led losers 1,007 to 912 on relatively moderate volume of 117 million shares.
Analysts said despite the widespread caution till the political outlook becomes clearer, some investors who had missed a nine-week rally were trying to make amends by building long positions.
”Those who are looking at the market from a medium to longer term perspective will be looking to enter the market now as they may have been left out earlier,” Gajendra Nagpal, chief executive of Unicon Financial Intermediaries in New Delhi, said.
“At the same time, some will be taking profits on the recent rally as the in the near term, the market is a bit overstretched,” he said.
Traders said investor sentiment was also helped by a rise in US stocks on Friday as bank stress test results and reassuring US jobs data fuelled hopes the worst was over for banks and the economy.
Private-sector lender ICICI Bank rose 3.4% to Rs538.35, while rival HDFC Bank advanced 1.1% to Rs1,156. Government-run State Bank of India, the country’s largest lender, gained 0.9% to Rs1,337.
Asian shares rose on Monday, with Japan’s Nikkei up 0.01%, while MSCI’s measure of other Asian market rose 0.9%.