Mumbai: Benchmark indices Sensex and Nifty experienced a downturn in early trading on Friday, with investors booking profits following recent record-breaking rallies and responding to global market sell-offs. Significant selling in major stocks like Reliance and ICICI Bank further dampened investor sentiment.
The 30-share BSE Sensex fell by 640.13 points, trading at 81,227.42 in the morning session. Similarly, the NSE Nifty dropped by 271.40 points to 24,739.50, with both indices declining up to 1 percent in early deals.
Among the Sensex components, Tata Motors, Maruti Suzuki India, Tata Steel, JSW Steel, Larsen & Toubro, Adani Ports, Tech Mahindra, and NTPC were the top laggards. Conversely, HDFC Bank, Hindustan Unilever, Asian Paints, Nestle India, and ITC were among the gainers.
“The rally in India has been sustained more by money flows into the market than by fundamentals. Without fundamental support, the rally cannot sustain. It remains to be seen whether the buy-on-dips strategy will work this time too. Given the high valuations, some profit booking, particularly in mid and small caps, can be considered,” commented V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Global oil benchmark Brent crude saw a rise of 0.78 percent, reaching USD 80.14 a barrel. Asian markets, including Tokyo, Shanghai, Hong Kong, and Seoul, were trading lower, following the US stock market’s lower close on Thursday after a record rally.
Foreign institutional investors bought equities worth Rs 2,089.28 crore in the capital markets on Thursday. Previously, the 30-share Sensex had climbed 126.21 points, or 0.15 percent, to settle at a new lifetime high of 81,867.55, while the NSE Nifty rose 59.75 points, or 0.24 percent, to reach an all-time closing peak of 25,010.90.
Additionally, a monthly survey released on Thursday indicated that India’s manufacturing sector growth slightly eased in July due to softer increases in new orders and output. However, cost pressures and demand strength led to the steepest increase in selling prices since October 2013. Government data also showed that GST collections in July rose by 10.3 percent to over Rs 1.82 lakh crore, primarily driven by domestic transactions in goods and services.
