BSE Sensex slumps to three-week low

Mumbai: The strong pre-election rally witnessed on the domestic bourses during the last few weeks seems to be finally loosing steam as foreign institutional investors (FII), the primary movers of the markets have turned net sellers of equities during the last two trading session.

Extending their losses for the third consecutive day, the Sensex tumbled 207.70 points or 0.92 per cent to end the day at 22,277.23 while the National Stock Exchange (NSE) Nifty slipped below its psychological 6,700 levels to close the session at 6,675.30, down 57.80 points or 0.86 per cents.

The retail inflation data, which inched up to 8.31 per cent during March coupled with a forecast showing below normal monsoon this year also dented investors’ sentiment.

“Overseas investors seem to be taking some profits of the table wherever they are sitting on huge profits. However, it’s too early to say whether this is a trend reversal as the markets are still expecting a stable and decisive government at the centre after the Lok Sabha polls. Any major trend reversal could happen only once the poll results are out on May 16, 2014,” said Vinod Nair, head of fundamental research, Geojit BNP Paribas Financial Services.  

For every 5-7 per cent correction in the market, Mr Nair expects fresh buying to emerge, which could again prop up the markets to new highs.