Mumbai, July 29 (IANS) Led by heavy selling in metal and auto stocks, the Sensex and Nifty resumed their declining trend on Monday after a pause on Friday.
While investors are distancing themselves from metal companies on the bourses over growth concerns, the auto sector is going through one of the worst patches in recent times, owing to the lack in demand.
The Sensex closed 196.42 points lower at 37,686.37, reversing early gains. The benchmark index had opened above the 38,000 mark. The broader Nifty settled 95.10 points lower at 11,189.20.
“Increase in auto registration cost, lack of liquidity and confusion over issuance of the India sovereign bond impacted the market. Rate cut expectation is high as FM (Finance Minister) is looking for significant ease in interest rate to spur economic growth,” Vinod Nair, Head of Research, Geojit Financial Services, said.
“The undercurrent is not very supportive since insipid Q1 results are adding clouds over the near-term visibility,” he added.
Besides, investors are cautious ahead of key results from companies like AITC, Bharti Airtel, Hero MotoCorp and Axis Bank.
On Monday, Foreign Portfolio Investors (FPIs) sold Rs 704.42 crore worth of scrips, taking the net outflow to a staggering Rs 14,728.47 crore in the month of July.
“Continued nervous unloading from FPIs and local non-institutional investors have led to a situation of continued erosion in values, either based on results or even otherwise,” Deepak Jasani of HDFC Securities said.