FPJ News Service mumbai

Indices remained range bound, and sentiment remained see-saw for the second straight day on Wednesday, predominantly due to lack of support from FIIs and premium valuations.

The 30-share BSE Sensex fell 239.31 points to settle at 81,312.32. The 50-issue NSE Nifty dropped 73.75 points to 24,752.45. Sensex stock ITC lost over 3% after BAT Plc trimmed its ownership in the conglomerate by divesting a 2.5% stake for $1.51 billion through a block deal.

FIIs bought equities worth Rs 4,662.92 crore. Domestic institutions bought equities worth Rs 7,911.99 crore on Wednesday, showing confidence in the market for the second day as they had bought equities worth Rs 10,104.66 crore on Tuesday.

“The indices remained range bound with a negative bias, primarily due to the lack of support from FIIs and prevailing premium valuations. A lingering concern over India-US trade relations following the end of the 90-day pause period continues to pose an external risk.

On the domestic front, key economic indicators such as an improved monsoon forecast, a benign inflation outlook, and expectations of a stronger Q4GDP may help cushion downside risks.However, earnings visibility needs to improve in tandem with the macros, which is vital for stability in the direction,” said Vinod Nair, Head of Research at Geojit Investments.

“The MPC is expected to cut policy rates by 25 bps in its June 6 meeting. Therefore, rate sensitives will be in focus in the coming days. Large liquidity with the mutual funds and the trend of sustained SIP inflows would encourage fund managers to buy consistently. Tariff issues and President Trump’s comments on a whole host of economic and non-economic issues would continue to weigh on markets. 

Buy on dips is the ideal strategy in the present phase of market consolidation. BAT’s sale of 2.3% stake in ITC will keep the stock subdued. This will provide an opportunity for long-term investors to buy this fairly-valued bluechip, recommended Dr VK Vijayakumar, a veteran investment strategist.

IndusInd Bank, Nestle, UltraTech Cement, Mahindra & Mahindra, Power Grid, Asian Paints, Sun Pharma and Tech Mahindra were among the losers. Bajaj Finance, Bharti Airtel, ICICI Bank, Adani Ports and HCL Tech were among the gainers. In Asian markets, South Korea’s Kospi settled in the positive territory while Japan's Nikkei 225 index, Shanghai's SSE Composite index and Hong Kong's Hang Seng ended lower.