Mumbai: Surrendering early gains, the benchmark BSE Sensex Monday fell by 256 points to settle below 29,000 level due to late selling mainly in banking, oil & gas and FMCG stocks as investors turned cautious days ahead of the Union Budget.
The 30-share index resumed higher at 29,316.58 against last close of 29,231.41 points. The barometer firmed up further to 29,362.96 on initial buying in early trade.
However, selling in bluechips like RIL, ITC and SBI in late trade dragged the index down to 28,913.16 before ending at 28,975.11, a loss of 256.30 points or 0.88 percent. It had lost 230 points in previous trade on Friday last.
All the BSE sectoral indices dropped up to 1.91 percent due to widespread selling by cautious investors.
The 50-share Nifty of NSE also moved down by 78.65 points or 0.89 percent to finish at 8,754.95.
"Markets started on a weak note ahead of the crucial Budget week dragged by Oil & Gas and Banking Sectors," HBJ Capital Senior Analyst Aamir Mir said.
Reliance Industries fell the most by 2.53 percent among the Sensex stocks. GAIL fell by 2.22 percent while Axis Bank lost 2.04 percent.
HDFC, ITC, SBI and Infosys which fell up to 2 percent were among major losers. Tata Steel, ONGC, Hindustan Unilever, Bajaj Auto, Tata Power and Hindalco also fell up to 1.87 percent.
Pharma giant Lupin fell by 2.5 percent after it said that the US Food and Drug Administration has raised concerns over production process at its Pithampur plant.
"Falling crude prices, bleak economic outlook by US Fed and relief amidst tensions over Greek economy, mixed sentiments amongst domestic market players due to constant flow of news and events related to union budget kept markets volatile today," said Hiren Dhakan, Associate Fund manager, Bonanza Portfolio.
The stock market may remain volatile this week ahead of the expiry of futures and options February contract on coming Thursday and presentation of budget on Saturday, brokers said.
Foreign portfolio investors sold shares worth a net Rs 89.41 crore in the previous session, as per provisional data released by the stock exchanges.
The stock market will remain open on Saturday, February 28, just like any other normal trading session as Finance Minister Arun Jaitley will present the first full-fledged Budget of the NDA government.
Besides, the Railway Budget will be tabled on Thursday and the Economic Survey will be presented on Friday.
Brokers said they expect markets to remain volatile in the coming week and remain in the range of 8,500-8,950 in the near term.
Inverstors were also cautious over passage of key reform bills in the Budget Session of Parliament that started today, they added.
Jignesh Chaudhary, Head Of Research, Veracity Broking Services said, "Indian local equities traded weak today; indices went down by over 1 percent during the day as investors chose to book profits in blue-chip stocks."
As many as 24 scrips out of the 30-share Sensex pack ended lower while 6 others finished higher.
Among the BSE sectoral indices, Consumer Durables fell by 1.99 percent followed by Oil&Gas 1.91 percent, Realty 1.32 percent, FMCG 1.26 percent, Bankex 0.88 percent, Metal 0.84 percent and Auto 0.68 percent.
Total market breadth turned lower as 1,698 stocks ended in red, 1,194 finished in green while 124 ruled steady. The total turnover dropped further to Rs 3,570.52 crore from Rs 3,715.63 crs on last Friday.
In overseas markets, European shares were trading higher after euro zone negotiators agreed to extend Greece's financial rescue package. Key benchmark indices in France and Germany were up 0.26 percent to 0.38 percent while In UK, the FTSE 100 shed 0.20 percent.
Asian stocks ended mixed as key indices in Hong Kong, South Korea and Japan were up 0.02 percent to 0.73 percent while indices in Indonesia and Singapore were off 0.11 percent to 0.42 percent. Markets in China and Taiwan remained shut for the Lunar New Year holidays.
