Mumbai, India (BBN) – The benchmark BSE Sensex was trading lower by over 260 points and the NSE index below 8,000 points on sustained capital outflows by foreign funds and heavy selling by retail investors amid a weak trend overseas.
Heavy FII outflows ahead of key US and ECB economic data later today, coupled with mute sentiment ahead of holidays, dampened the trading sentiment, reports The Hindu Business line.
Domestic sentiment was also hit as the country’s cash crunch continued to weigh on corporate earnings expectations for the December quarter.
At 1:20pm, the 30-share BSE index Sensex was down 260.89 points or 0.99 per cent at 25,981.49 and the 50-share NSE index Nifty was down 84.7 points or 1.05 per cent at 7,976.60.
Among BSE sectoral indices, metal index fell the most by 2.56 per cent, followed by infrastructure 1.94 per cent, power 1.53 per cent and capital goods 1.43 per cent.
Top five Sensex losers were Adani Ports (-3.63%), Tata Steel (-2.85%), ONGC (-2.8%), Infosys (-2.4%) and Bharti Airtel (-2.3%), while the only two gainers were ITC (+0.11%) and Wipro (+0.01%).
The NSE index, which fell below the 8,000 mark for the first time since November 25, was on track for a seventh straight session of declines, its longest losing streak in 1-1/2 years.
The index last recorded a seven-day losing streak in June 2015, when the India Meteorological Department cut its forecast for monsoon rainfall for the year.
Indian shares, like their regional counterparts, have taken a hit due to the Federal Reserve’s hawkish US interest rate forecast last week that led to foreign selling in emerging markets.
In India, foreign institutional investors have sold a net $250.28 million in shares this month as of December 20.
Analysts said investors were booking profits due to a lack of a clear domestic triggers and persisting worries about the impact from a ban on higher value banknotes on the economy and corporate profits.
“There is no clarity in the expectations of earnings routes for investors,” said Saurabh Jain, assistant vice-president of research at SMC Global Securities.
“Due to demonetisation, earnings for the December quarter is expected to be tepid, and there are also expectations that the impact could be carried into the next fiscal year.”