Mumbai: Indian stock market took a breather after a six-session dizzying rally, with benchmark indices Sensex and Nifty skidding from their closing peaks after emergence of sell-off in recent high-flying counters.
The investor sentiment was majorly driven by under-pressure banking stocks, which had recently seen sharp run-up in valuation, as the market was concerned over government’s move to allocate higher capital to weaker banks.
Besides, a mild volatility erupted as Thursday being the last session of January expiry in the derivatives segment and also ahead of a long weekend.
The BSE Sensex Thursday fell over 111 points, or 0.31 per cent, to close at 36,050.44; and the NSE Nifty concluded the session with a loss of over 16 points, or 0.15 per cent, at 11,069.65.
On a weekly basis, it was eighth straight week of gains for the markets. During the period, the 30-share Sensex added 538.86 points, or 1.51 per cent; while the broader Nifty gathered 174.95 points, or 1.60 per cent.
Anand James, chief market strategist, Geojit Financial Services, said, “With the bulk of recapitalisation funds going to the banks in the PCA category, PSB heavy weights quickly let go off the recent gains, putting pressure on market sentiments. Nifty rollover which was the lowest in 5 months until yesterday, quickly gathered pace putting a lid on upside attempts…”
Among the Sensex constituents, SBI was in red, tumbling the most by about 5 per cent a day after the government said it will inject Rs 88,139 crore capital in 20 public sector banks (PSBs) before March.
Other state-run lenders, Punjab National Bank and Bank of Baroda also retreated by up to 7.07 per cent.
Overall sentiment was cautious as investors were on a wait-and-watch mode ahead of the Union Budget to be unveiled February 1 and a long weekend as markets will remain shut Friday on account of Republic Day.
Investors were concerned over surging global crude prices which climbed to over three year highs to trade at USD 71 a barrel too negatively impacted sentiments, traders said.
The Sensex after rising to 36,247.02 points in early trade, turned negative and cracked the 36,000-mark to hit a low of 35,823.35 as participants indulged in squaring-up their positions in view of expiry amid profit-booking at record levels. (PTI)
