Persistent foreign fund outflows and selling in blue-chip bank stocks dragged Indian stock indices on Friday.
The 30-share BSE Sensex declined 299.17 points to 80,684.14 in opening trade, while the 50-share NSE Nifty dropped 76.75 points to 24,759.55.
From the Sensex firms, Mahindra & Mahindra, Bajaj Finserv, UltraTech Cement, HDFC Bank, Bajaj Finance, Trent, ICICI Bank and Maruti were among the major laggards.
However, Tata Steel, Axis Bank, Tata Motors and Bharat Electronics were among the gainers.
Foreign Institutional Investors (FIIs) offloaded equities worth ₹1,605.20 crore on Wednesday, while Domestic Institutional Investors (DIIs) bought stocks worth ₹2,916.14 crore, according to exchange data.
Earlier this week, the Reserve Bank of India (RBI) had wrapped up its bi-monthly policy meeting in which the apex bank retained the current interest rates.
Also Read: Stock markets trade higher ahead of RBI’s interest rate decision
Investors say this move is enough to boost credit growth in the economy, but might not be enough to counter persistent FII selling in the market.
“The positive impact of the central bank’s bold initiatives to boost credit growth in the economy has the potential to sustain the momentum in the market, particularly in Bank Nifty. But this momentum is unlikely to sustain in the context of persistent FII selling in the market,” said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd.
Vijayakumar said selling by FIIs is likely to accelerate since the current market conditions are conducive for selling.
“FIIs are likely to further accelerate selling since the market construct provides them the opportunity to sell aggressively. The huge short position in the market indicates that the bulls will be on the defensive,” he said.
In Asian markets, South Korea’s Kospi and Japan’s Nikkei 225 index were trading sharply higher, while Hong Kong’s Hang Seng index quoted lower.
US markets ended higher on Thursday.
Global oil benchmark Brent crude climbed 0.59 per cent to USD 64.49 a barrel.
Equity markets were closed on Thursday for Mahatma Gandhi Jayanti and Dussehra.
On Wednesday, the Sensex jumped 715.69 points or 0.89 per cent to settle at 80,983.31, and the Nifty climbed 225.20 points or 0.92 per cent to 24,836.30.
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