Sensex snaps six-day winning run; FPIs sell shares worth Rs 1.8k crore

Losses in RIL, L&T offset gains in IT stocks

Benchmark Sensex snapped a six-day winning streak on Friday amid frenetic selling by foreign portfolio investors (FPIs) and losses endured by index heavyweight Reliance Industries (RIL).

The 30-share bluechip index finished at 77,210, after declining 269 points, or 0.4 per cent, while the Nifty ended the session at 23,501, down 66 points, or 0.3 per cent.

During the preceding six trading sessions, the Sensex added 1,022 points, or 1.34 per cent.

It closed at a fresh record high during the previous five consecutive sessions amid buying support from foreign funds and rising optimism about economic growth prospects.

Despite the latest decline, the Sensex ended the week with a gain of 0.3 per cent and the Nifty added 0.2 per cent.

Experts said profit booking amid weak global cues weighed on market performance. However, concerns about valuations and the fallout from French President Emmanuel Macron's decision to call a snap election weighed on the minds of investors.

The lesser-than-expected Eurozone manufacturing numbers also perturbed investors. The snap poll in France has left investors worried that an economic rebound will be impacted if far-right leaders win the elections.

On Friday, FPIs were the net sellers worth Rs 1,790 crore. During the week, FPIs bought shares worth Rs 10,210 crore.

Markets have recovered sharply after dropping 6 per cent on the election result day.

Investor sentiment has been boosted by the National Democratic Alliance (NDA) partners' support for Prime Minister Narendra Modi, which ensured continuity in governance.

Additionally, recent upgrades to India's economic growth outlook have increased appeal among foreign investors.

Going forward, the earnings season and the Union Budget will determine the market trajectory.

"Overall, the market is likely to remain steady and consolidate at higher levels in the near term. Budget-related sectors are likely to remain in action on the back of news flow and expected growth-focused policy. Sectors like fertilisers, gaming, and oil and gas would react to the outcome of the GST council meeting, which is scheduled over the weekend," said Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services.

The market breadth was mixed with 1,784 stocks advancing and 2,086 declining.

RIL declined 1.3 per cent and was the biggest contributor to Sensex declines followed by Larsen and Toubro, which fell by 1.8 per cent.

“Nifty has been struggling to maintain levels above 23,600, although it remains steady above the support zone indicated by moving averages. We thus recommend focusing on selective stock picking during this period and using it as an opportunity to accumulate high-quality stocks. Besides domestic factors, global market performance will also be closely watched in the absence of major events," said Ajit Mishra, SVP Research, Religare Broking.