Markets decline for 2nd day; down 1%

Indian markets posted their worst-single day fall in six weeks, as investors continued to book profits after the recent rally in several stock prices. Both the Sensex and the Nifty registered a fall of one per cent each, the most since June 24, when the outcome of the Brexit referendum was declared.

The benchmark Sensex fell 1.1 per cent, or 310 points, to end at 27,774.88, while the Nifty 50 lost nearly 1.2 per cent, or 103 points to settle at 8,575.3.

The Indian markets have rallied 20 per cent from 2016's lows touched on February 29. The Sensex and the Nifty have been seen hitting resistance at 28,000 and 8,600 levels, respectively.

In continuation with the recent trend, domestic institutional investors (DIIs) were big sellers in the market, while foreign institutional investors (FIIs) remaining strong buyers. According to stock exchange data, DIIs were net sellers to the tune of Rs 750 crore, while FIIs remained buyers at Rs 412 crore.

In the past month, FIIs have poured nearly $2 billion into Indian equities.

According to market participants, these corrections are healthy ones and, going forward, if there are more declines, investors can use them as buying opportunities. They add that the markets have seen a steep rally in a short span of time and the trend is likely to be arrested.

Deven Choksey, managing director of KRChoksey Shares and Securities, says, "Today's correction is nothing but a running correction in stocks. There will be more such corrections going forward. Investors need to stay away from the euphoria and buy quality stocks when they crack. The world market, including ours, had moved up due to a gush of liquidity and some corrections are underway."

Among the sectoral indices, pharmaceuticals and automobile bore the most brunt on Wednesday as they fell 2.01 per cent and 1.93 per cent, respectively. Shares of Aurobindo Pharma, Glenmark and Lupin were the most hit as their counters lost between 2.4 per cent and four per cent.

In the automobile sector, stocks of companies like Tata Motors, Maruti Suzuki, Eicher Motors, Motherson Sumi, Hero MotoCorp, Mahindra & Mahindra, Apollo Tyres were down two-six per cent.

Ambareesh Baliga, an independent market expert, says, "It's time to book partial profit as there could be corrections to the level of 8,200 on the Nifty going ahead. This will be a healthy correction and should be used to buy. The markets had a steep rally and correction is on the horizon.

Of the 50 stocks in Nifty, 42 ended in the red; while seven gained and one remained unchanged. Shares of companies such as Ambuja Cements, Idea Cellular, Grasim Industries and ACC declined 4-7.3 per cent. On the other hand, Adani Ports, Bank of Baroda and TCS were the top gainers on Wednesday.

Meanwhile, global oil prices extended losses after industry data showed a rise in US crude stockpiles. The oversupply concerns also added negative sentiments to stocks.