Continuous FII Selling Keeps Mkts Under Pressure For 3rd Day

Mumbai: Equity benchmark indices Sensex and Nifty stayed on the back foot for the third straight session on Wednesday as investors offloaded utility, capital goods and metal stocks amid foreign fund outflows.

Besides, investor sentiment remained subdued ahead of the outcome of the US Federal Reserve’s policy meeting, scheduled for Wednesday, traders said. The 30-share BSE benchmark tumbled 502.25 points or 0.62 per cent to settle at 80,182.20, taking its downtrend to the third day. Dur-ing the day, it tanked 634.38 points or 0.78 per cent to 80,050.07. As many as 2,563 stocks de-clined while 1,442 advanced and 94 remained unchanged on the BSE. The NSE Nifty declined 137.15 points or 0.56 per cent to 24,198.85.

“The near-term market construct has turned weak, with FIIs turning sellers on rallies. Tuesday’s massive FII sell figure of Rs6,410 crore in the cash market indicates that more selling is in store on market bounces. The focus of global markets today will be the Fed decision expected tonight. A 25 bps rate cut is priced in by the market. So, the attention will be on the Fed commentary,” said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

The market capitalisation (mcap) of BSE-listed companies fell by Rs2.54 lakh cr to Rs4,52,60,266.79 cr (Rs452.60 lakh cr or $5.33 trn).

“Nifty fell for the third consecutive session, losing 137 points amid selling pressure ahead of the US Fed’s interest rate decision later on Wednesday. Over these three sessions, Nifty dropped by 2.3 per cent. FII selling intensified on Tuesday as they offloaded equities worth Rs 6,400 crore, inducing cautiousness in Indian markets. Investors will also watch out for interest rate decisions of Japan and England as well as US Q3 GDP data to be released tomorrow. We expect markets to remain sideways with the Fed commentary determining the near-term direction,” added Sid-dhartha Khemka, head (research), Wealth Management, Motilal Oswal Financial Services Ltd.

The BSE smallcap index declined 0.76 per cent, and the midcap gauge dipped 0.61 per cent. Among sectoral indices, utilities tanked 2.06 per cent, power (1.78 per cent), capital goods (1.56 per cent), metal (1.44 per cent), industrials (1.30 per cent) and financial services (1.20 per cent).

“Investors shunned stocks led by banking ahead of the outcome of the US rate decision with a focus on the Fed chairman’s commentary on inflation and growth outlook in the backdrop of the worsening global economic situation. The rupee continuing its downward trajectory and hitting fresh lows also dampened the sentiment, as extended fall could further worsen trade deficit and hit inflation going ahead,” said Prashanth Tapse, senior V-P (research), Mehta Equities Ltd.