Mumbai: India’s benchmark equity index Sensex fell as much as 400 points on Monday afternoon, as the market sentiment was weak tracking the broader decline in Asian shares, while an active primary market has also meant that funds have shifted to the recent big initial public offers, dealers said.
At 2:43pm, BSE’s 30-share Sensex was trading 1.02%, or 325.73 points, lower at 31,596.71 points, while the National Stock Exchange’s 50-share Nifty had shed 1.07%, or 106.55 points, at 9,857.85 points.
Earlier in the day, Sensex fell as much as 1.4%, or 447.88 points, to 31,474.72, while Nifty had declined as much as 1.47%, or 146.55 points, to 9817.85 points.
Market breadth was weak with nearly 5 shares declining for every share that advanced, but slightly better than early trade when nearly 8 shares were down for every share that climbed.
“The market had run up a lot, and a correction was in the offing given the high valuations. Weak Asian markets hurt the sentiment,” said Hemang Jani, senior vice-president and head of advisory desk at Sharekhan by BNP Paribas
“Some of the big primary offerings have absorbed liquidity from the market. FIIs (foreign institutional investors) are also net sellers. That sucked out liquidity from the market,” added Jani.
For the fiscal year to date, FIIs are net sellers of Indian shares to the tune of $450 million.
Jani said that all eyes were on whether Prime Minister Narendra Modi announces stimulus packages for housing, power and exports sector
BSE mid-cap and BSE small cap indices saw steeper declines, and were down 1.58% and 1.36% respectively. There was however a small recovery in this pack, compared to morning trade.
All the sectoral indices were trading lower, with BSE realty index and BSE metals index leading the declines, down 3.28% and 2.67% respectively.
Cigarettes to hotels business ITC Ltd. shed 2.33%, contributing the most to the losses on the Sensex.
Financials, though, weighed on the Sensex the most. Mortgage lender Housing Development Finance Corporation Ltd. fell 1.67%, while private lender HDFC Bank Ltd. shed 1.35%.