Mumbai: Investors chose to sit tight on Wednesday as the Sensex remained in the bearish territory for the second day, dropping further by 98 points, and anxiety concerning state poll results and a probable Fed rate hike grew.
Exit poll numbers will start trickling in tomorrow and the final results are due Saturday. There is also some concern that the US Federal Reserve may raise borrowing costs next week.
The BSE Sensex hit a low of 28,815.48 before settling down 97.62 points, or 0.34% at 28,901.94. The NSE Nifty closed lower by 22.60 points, or 0.25% at 8,924.30. Mid-cap and small-cap indices fell 0.56% and 0.31%, respectively, on sustained selling pressure from retail investors. European markets were mixed in reaction to Germany data showing industrial production growing 2.8% in January. Investors waited for Britain’s budget.
Asia threw up a similar trend. Foreign funds bought shares net worth Rs 920.46 crore on Tuesday, as per the provisional figures. Tata Steel suffered the most by diving 1.89%, followed by ONGC 1.78%. Infosys, GAIL, RIL, M&M, Coal India and Tata Motors also fell. On the contrary, SBI, TCS, PowerGrid, Cipla, HDFC Bank and Sun Pharma ended higher.
MTNL shares on Wednesday soared 16.04% following reports of a renewed discussion of its merger with BSNL. Metal suffered maximum losses, down 1.91%, followed by realty, oil and gas and PSU. Japanese stocks led the regional decline, but Hong Kong’s Hang Seng rose.
“The market is in a consolidation phase and is probably already over-rated. Election results followed by the Fed meeting are important for the Indian market, after which it will take a call accordingly next week,” said R.K. Gupta, managing director at Taurus Asset Management Company. “Whatever may be the outcome of the elections, the market is going to take a correction.”
The IT stocks were among the biggest percentage losers on the NSE index, with Infosys Ltd and HCL Technologies Ltd shedding more than 1% each.
With inputs from Reuters