FII offloading spooks markets

Mumbai: Benchmark indices, Sensex and Nifty, tanked more than one per cent on Wednesday due to heavy selling pressure in banking and financial shares amid unabated foreign capital outflows.

The 30-share BSE barometer plunged by 773.69 points or 1.27 per cent to 60,205.06 as 22 of its scrips declined while eight advanced. The index opened lower and later fell nearly 900 points during the day to touch a low of 60,081.36 as investors closed their positions on the last day of derivatives expiry. The broader Nifty of the National Stock Exchange declined sharply by 226.35 points or 1.25 per cent to close below the 18,000 level at 17,891.95. As many as 35 of its scrips ended in the red and 15 gained. "Indian equities witnessed a significant sell-off as the market appeared apprehensive ahead of the upcoming Union Budget and Fed meeting next week. Sentiments were dampened by persistent FII selling, where funds are being shifted to other EMs as a result of attractive valuations. Furthermore, a weak economic growth outlook that stoked recession fears pulled down global markets," Vinod Nair, Head (Research), Geojit Financial Services.

Analysts said that traders offloaded stocks ahead of the Adani Enterprises Rs20,000 crore FPO, while migration from T2 to T1 settlement starting on Friday also led to some selling. "Markets plunged sharply lower on the monthly expiry day and ended with a cut of over a per cent. After the flat start, the Nifty index drifted gradually lower in the first half and remained in a narrow band thereafter," said Ajit Mishra, V-P (Technical Research), Religare Broking.