Persistent weakness in overseas markets along with the post-Budget disappointment among market participants continued to pull the domestic equity bourses downwards. On Monday, the 30-share Sensex of the Bombay Stock Exchange (BSE) opened the day with a downward gap of 200 points and slid further to touch an intra-day low of 13,219.99 points.
However, a strong rally in financial and IT sector stocks like Infosys, Wipro, ICICI Bank, SBI and HDFC helped the benchmark Sensex stage an intra-day recovery and end the trading session at 13,400.32 points, down by 103.90 points or 0.77%. On the other hand, the broader Nifty of the National Stock Exchange (NSE) ended the day at 3,974.05 points losing 29.85 points or 0.75%.
The Asian markets, too, traded deep in the red with Japanese Nikkei 225 closing the day lower by 2.55% while Seoul Composite and Taiwan Weighted each lost 3.53%.
Since majority of the large cap stocks had witnessed a price correction in the range of 20%- 25% post-Budget, experts argue that the intra-day recovery is just a technical pull back from the lower levels.
?Currently, the market has been impacted by a combination of two factors ? Budget and global issues,? said Gopal Agrawal, head of equity ? Mirae Asset Global. He said that apart from the global developments, corporate earnings on the domestic side would also be an important factor for the market in the coming days.
The market had expected big bang financial sector reforms in the Budget like increased FDI limit in insurance and banking sectors along with announcement of PSU disinvestment. With the Budget not mentioning any strong steps towards these reforms, the markets corrected sharply with the benchmark Sensex losing 10.14% and Nifty shedding 10.18%. However, foreign institutional investors are still upbeat on the domestic equity market.
They have been net selling in the past two trading sessions. Since July 6, when the market had corrected sharply, FIIs had bought equity worth Rs 2,567.82 crore, according Sebi .
On Monday, 2,009 stocks declined in the BSE compared to 567 that went up.