Mumbai: Equity benchmarks retreated from record highs on Thursday with the Nifty snapping 10-day winning streak on account of profit booking in banks, oil & gas and capital goods stocks.
The market fell as much as 0.8 percent intraday but it managed to trim losses in late trade. The Sensex was down 42.42 points to close at 22509.07 while the Nifty fell 16.45 points to 6736.10 after hitting an intraday low of 6,696.90.
Market experts see such intermittent correction going ahead, but they do not see major correction as they feel the market will continue to see record highs at least till general elections outcome.
UR Bhat, MD, Dalton Capital Advisors said all the good news surrounding the expectations of a stable government has been already factored in. Infact he cautioned of a pre-election sell-off, but added the downside won't be much.
The current rally is on the back of foreign funds and a favourable election verdict could take the Nifty 7,000, but after polls market may cool off , he said.
He believes that this is not the time to make fresh investments in the market but those already holding positions may stay put. Banks, capital goods, oil & gas and Tata group stocks saw selling pressure while defensives like healthcare and FMCG shares supported the market.
BSE Bankex fell more than a percent as top lender State Bank of India and its rival Axis Bank plunged 2 percent each. ICICI Bank was down 0.6 percent. Engineering and construction major L&T trimmed losses in late trade after the management clarified about write-off of slow moving orders .
The stock closed with 0.77 percent loss after falling as much as 3.5 percent intraday. State-run power equipment maker BHEL lost over 3 percent while GAIL and Coal India fell 2 percent each. Petrochemical major Reliance Industries was down 0.5 percent and state-owned ONGC lost over a percent. IDFC shares plunged over 2 percent on profit booking. The stock rallied as much as 8.7 percent intraday today after the Reserve Bank of India on Wednesday has granted in-principle nod for banking license to company. Bandhan Financial Services was another company that received in-principle nod for banking license. However, shares of Hindustan Unilever, Cipla and Dr Reddy's Labs bucked the trend with more than 1.5 percent upmove. ITC, HDFC, Infosys, M&M and Hindalco gained over 0.5 percent.
Drug maker Sun Pharma was up 0.6 percent after its subsidiary Caraco has received approval from USFDA for diuretic drug Furosemide. Sesa Sterlite climbed 0.6 percent and Hindustan Zinc rose 1 percent after rating agency Moody's raised Vedanta Resources rating outlook to stable from negative. Declining shares outnumbered advancing ones by a ratio of 1493 to 1275 on the Bombay Stock Exchange.