Sensex, Nifty Fall After Rally: US Fed, FII Outflows Impact

Mumbai, Nov 7 (PTI) Snapping its two-day winning run, benchmark Sensex tanked 836 points due to profit-taking in banking and auto shares as investors turned cautious ahead of the US Federal Reserve policy decision and unabated foreign fund outflows.

As the optimism over Donald Trump's win in the US presidential polls waned, the BSE Sensex dropped by 836.34 points, or 1.04 per cent, to settle at 79,541.79. During the day, it slumped 958.79 points or 1.19 per cent to 79,419.34.

The NSE Nifty declined 284.70 points or 1.16 per cent to finish at 24,199.35.

From the 30-share Sensex pack, Tata Motors, Tech Mahindra, UltraTech Cement, JSW Steel, Sun Pharma, Asian Paints, IndusInd Bank and ICICI Bank were the major losers.

State Bank of India emerged as the only gainer from the pack.

Foreign institutional investors (FIIs) offloaded equities worth Rs 4,445.59 crore on Wednesday, according to exchange data.

"The domestic market ended with a deeper cut while eroding the previous day's gains. Disappointing Q2 and persistent selling by FIIs continue to dampen market sentiment.

"The broader market saw a widespread sell-off as optimism over Trump's election victory waned. However, investors are now shifting their attention to the upcoming Fed policy meeting and domestic public outlay, which are anticipated to offer more insight into the future trade path," Vinod Nair, Head of Research, Geojit Financial Services, said.

The BSE midcap gauge declined 0.67 per cent and smallcap index went lower by 0.44 per cent.

All sectoral indices ended lower. Metal tumbled 2.54 per cent, utilities (1.82 per cent), commodities (1.65 per cent), realty (1.45 per cent), power (1.42 per cent) and auto (1.40 per cent).

A total of 2,134 stocks declined while 1,821 advanced and 98 remained unchanged on the BSE.

"With the focus now on the U.S. Fed post-election, markets are expected to react to the outcome of the FOMC meeting and the Fed Chair's commentary," Ajit Mishra – SVP, Research, Religare Broking Ltd said.

Prashant Tandon, Executive Director, Investment Advisory, Waterfield Advisors stated that after Trump's win, equities are expected to rise on hopes of tax cuts to individuals and corporates but higher duties and spendings may boost the US dollar and push up treasury yields.

In Asian markets, Seoul, Shanghai and Hong Kong settled higher while Tokyo ended lower.

European markets were trading in positive territory. Wall Street ended significantly higher on Wednesday.

Global oil benchmark Brent crude dipped 0.33 per cent to USD 74.67 a barrel.

The BSE benchmark jumped 901.50 points or 1.13 per cent to settle at 80,378.13 on Wednesday. The Nifty soared 270.75 points or 1.12 per cent to 24,484.05.