Sensex closes below 23,000, Nifty at over 20-month low; Union budget eyed

Mumbai: India’s benchmark Nifty index fell for a third-straight day to its lowest close in more than 20 months on Thursday as investors were nervous ahead of Union budget to be unveiled on Monday.

Expiry of monthly derivatives contract also kept the markets choppy.

The benchmark index has erased all gains since the National Democratic Alliance (NDA) came to power in May 2014.

National Stock Exchange’s (NSE’s) 50-share Nifty closed 0.69%, or 48.10 points, lower at 6,970.60, its lowest close since 9 May 2014. BSE’s 30-share Sensex shed 0.49% to 22,976 points, its lowest close since 11 February.

The railway budget also failed to cheer the market, and all eyes were set on the Union Budget which is set to be detailed on Monday.

“Investors were on the sidelines ahead of the budget next week There was nervousness regarding the (derivatives) expiry. The weakness in some Asian markets had a rub off effect,” said Vaibhav Sanghavi, managing director of Ambit Investment Advisors Pvt. Ltd. “The environment at large is pretty volatile.”

Six of 30 Sensex stocks touched a fresh 52-week low in intra-day trading on Monday.

S&P BSE Power index and S&P BSE Utilities index declined the most amongst sectoral indices. They dropped 2.46% and 2.19%, respectively. State Bank of India and GAIL (India) Ltd were the biggest losers among Sensex stocks with a 3.06% and 2.96% decline, respectively.

“Towards the end of the (February derivatives) series, selling pressure resumed to end the series towards the 7,000 mark (Nifty),” said Sahaj Agrawal, deputy vice president-derivatives research at Kotak Securities Ltd.

“Banking, capital goods remains under pressure while metals outperformed the broader markets. FMCG and IT also remained under pressure and hence dragging the broader markets downwards,” Agrawal said.

Agrawal said he expects Nifty to hold its support of 6,800-6,850 and bounce back to test 7,250/7,400 levels in the March series.

Foreign institutional investors, or FIIs, have pulled out a net of $2.3 billion from Indian equities so far this year, mainly as a slowdown in China and cracking commodity prices played spoilsport.

On the domestic front as well, earnings continued to be tepid and the asset quality of banks continued to bother investors.