The sensex broke through the 77k threshold for the first time in early trades on Monday, but profit-taking at higher levels caused it to settle at 76,490, down 203 points. On the NSE, the Nifty also reached a fresh high of 23,412 points before closing at 23,259, down 31 points.
The day's session saw a rise in volatility as the Sensex reached a new life-high before falling 700 points. According to Prashanth Tapse of Mehta Equities, market volatility resurfaced as the sensex dropped off its record high and fell significantly towards the close, fueled by profit-taking in IT, commodities, and oil & gas sectors. "Lacklustre sentiment also prevailed due to weak global cues after recent data from the US indicated that ratecut may not happen soon," he added.
According to Siddhartha Khemka of Motilal Oswal Financial Services, IT stocks were a drag on Monday's market, with the sector's index finishing down 1.8%. Metals were the next biggest losers. "Fertilizer stocks rose when the Prime Minister announced the next installment of the Kisan Samman Nidhi. Cement stocks rose on hopes of a government push into the housing industry and a reduced GST on cement."
Going ahead, the Budget will be one of the most closely followed events in the market. "With the Budget around the corner, stock and sector-specific action could be seen going ahead on hopes of tax sops or duty cuts," Tapse of Mehta Equities said.
On the global front, market mood was hurt last week as data indicated robust non-farm payroll growth in the United States, lowering expectations of a rate drop by the US Federal Reserve in the second half of the year, according to Khemka of Motilal Oswal Financial Services. "Investors are now waiting for the US Federal Reserve and Bank of Japan's policy decisions this week, as well as the US and India's CPI statistics.
The day's session saw foreign funds turn net buyers at Rs 2,572 crore, while domestic funds saw a net inflow of Rs 2,764 crore, according to BSE end-of-session statistics. The day's session left investors somewhat wealthier by Rs 1.8 lakh crore, with the BSE's market capitalization currently at Rs 431.4 lakh crore.
