Sensex declines 359 points on selling in IT shares, foreign fund outflows

The 30-share BSE Sensex fell by 359.64 points or 0.51% to settle at 70,700.67. 
| Photo Credit: PTI

Benchmark Sensex declined by 359 points while Nifty closed below the 21,400 level on January 25 due to selling in IT shares and continuous foreign fund outflows.

The 30-share BSE Sensex fell by 359.64 points or 0.51% to settle at 70,700.67. The index opened lower and plunged further 741.27 points or 1.04% to hit a low of 70,319.04 in day trade. As many as 19 Sensex shares dropped while 11 advanced.

The broader Nifty fell by 101.35 points or 0.47% to settle at 21,352.60 with 34 of its constituents closing in the red.

A rise in U.S. bond yields and mixed financial results by corporates triggered FII selling, analysts said. IT, pharma and FMCG shares declined while realty and energy stocks bucked the trend.

Among Sensex shares, Tech Mahindra fell by over 6% after the company reported a 60% decline in net profit to ₹510.4 crore in the December quarter.

Bharti Airtel, ITC, Asian Paints, HDFC Bank, Nestle, Tata Steel, and Maruti were among the other major laggards.

IT shares declined as third-quarter results have failed to impress investors. Wipro dropped 1.68%, HCL Tech by 1.54%, TCS by 1.03% and Infosys by 0.22%.

NTPC, ICICI Bank, IndusInd Bank, Reliance Industries, JSW Steel, Bajaj Finance, Bajaj Finserv and Mahindra & Mahindra were among the gainers.

“The benchmark indices closed on a negative note taking cues from the global market as the positive upside coming from the U.S. economy delayed the optimism of a rate cut,” said Vinod Nair, Head of Research, Geojit Financial Services.

“FIIs are in a selling mode as the yields on U.S. benchmark bonds rise. The broader market is unable to hold gains as concerns of high valuations, sub-par results, and persisting geopolitical tension in the Middle East, followed by an F&O expiry, are weighing down the market,” Mr. Nair added.

In the broader market, the BSE midcap gauge declined 0.36% while smallcap index climbed 0.54%.

Among the indices, teck fell by 1.39%, IT declined 1.23%, telecommunication (1.21%), FMCG (1.01%) and bankex (0.58%).

Utilities, power, services, commodities and realty were the gainers.

Markets will remain closed on Friday for Republic Day.

On the weekly front, the BSE benchmark fell by 982.56 points or 1.37%, and the Nifty declined 269.8 points or 1.24%.

“The prevailing pressure in banking majors is largely weighing on the sentiments however selective buying in others is capping the damage so far,” Ajit Mishra, SVP – Technical Research, Religare Broking Ltd said.

In Asian markets, Seoul, Tokyo, Shanghai and Hong Kong settled in the positive territory.

European markets were trading mostly lower. The U.S. markets ended on a mixed note on Wednesday.

Foreign institutional investors (FIIs) offloaded equities worth ₹6,934.93 crore on Wednesday, according to exchange data.

Global oil benchmark Brent crude climbed 1.02% to $80.96 a barrel.