Stock markets decline in initial trade on foreign fund outflows, weak Asian peers

Mumbai: Equity benchmark indices Sensex and Nifty were trading lower in early trade on Tuesday amid persistent foreign fund outflows and weak trend in Asian markets.

The 30-share BSE Sensex dropped 55 points to 83,923.48 in early trade. The 50-share NSE Nifty dipped 40.95 points to 25,722.40.

From the Sensex firms, Power Grid, Eternal, HCL Tech, Maruti, Tata Motors and Infosys were among the major laggards.

However, Bharti Airtel, Titan, Reliance Industries and Mahindra & Mahindra were the gainers.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,883.78 crore on Monday, according to exchange data. Domestic Institutional Investors (DIIs), however, bought stocks worth Rs 3,516.36 crore in the previous trade.

"FIIs renewed selling is constraining the rally in the market. During the last four days FIIs have sold equity worth Rs 14,269 crore. This is an indication that they will continue to sell on rallies. Higher valuations in India and muted earnings growth are restraining FIIs who are more focused on cheaper markets with better earnings growth," V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.

In Asian markets, South Korea's Kospi, Japan's Nikkei 225 index and Shanghai's SSE Composite index quoted lower while Hong Kong's Hang Seng index traded in positive territory.

US markets ended mostly higher on Monday.

Global oil benchmark Brent crude dipped 0.20 per cent to USD 64.76 a barrel.

On Monday, the Sensex inched up by 39.78 points or 0.05 per cent to settle at 83,978.49. The Nifty eked out a marginal gain of 41.25 points or 0.16 per cent to end at 25,763.35.