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BW Businessworld

Sensex Snaps Four-Day Winning Streak; Foreign Investors Sell

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The BSE Sensex snapped a four-session winning streak on Wednesday (21 May) as blue chips, including Larsen & Toubro Ltd, retreated from recent strong gains a day after foreign investors turned net sellers for the first time in about a month.

Foreign investors sold Indian cash shares worth a net Rs 104 crore ($17.8 million) on Tuesday (20 May), their first selling since April 16, provisional exchange data showed.

Investors took that milestone as an opportunity to take profits in recent outperformers, especially in domestic-oriented sectors that have led a powerful rally in anticipation of a victory for Bharatiya Janata Party and Narendra Modi, its candidate for prime minister.

"I do not think the market would take profit-taking or small sales by FIIs seriously. FII interest in India has increased considerably on hopes that policy bottlenecks would be removed soon," said Arun Gopalan, vice-president of research and fund manager at Systematix Shares.

The benchmark BSE Sensex fell 0.32 per cent, or 78.86 points, to end at 24,298.02, retreating from a record closing high hit a day earlier.

The index still remains below the all-time high of 25,375.63 hit on Friday (16 May), when the BJP won a clear majority in the country's elections.

The broader Nifty lost 0.31 per cent, or 22.60 points, to end at 7,252.90.

Domestic-oriented stocks fell after leading the recent rally on expectations that a Modi-led government would pass major reforms to revive an economy growing at its slowest in a decade.

Among capital goods makers, Larsen & Toubro declined 2.2 per cent after marking its highest in 6-1/2 years in the previous session, while Bharat Heavy Electricals lost 2.4 per cent.

UltraTech Cement slumped 3.2 per cent, while ACC fell 2.9 per cent.

The NSE bank sub-index fell 1.1 per cent, heading for a second day of falls on profit-taking after making a record closing high on Monday (19 May).

State Bank of India lost 2.7 per cent, Axis Bank ended down 2.3 per cent, HDFC Bank fell 0.8 per cent and ICICI Bank  ended 0.6 per cent lower.

Sun Pharmaceutical Industries Ltd SUN.NS fell 1.8 per cent after the USFDA said on Tuesday that the drugmaker's response to a US import ban on one of its plants lacked "sufficient corrective actions."

But among the gainers, Bajaj Auto Ltd rose 5.1 per cent after the motorcycle maker's management issued a better-than-expected outlook in a conference call with analysts.