(HT)
Benchmark indices closed in the red for the second straight session on Friday amid fears of India and Pakistan escalating tensions. While both Nifty and Sensex recovered from their intraday lows, anticipation of tensions over the weekend led foreign portfolio investors (FPIs) to press the sell button in both the cash and derivatives segment.
The set up by the end of the day indicates continuation of the downside pressure, unless tensions abate.
Selling in heavyweights such as ICICI Bank, HDFC Bank and Reliance Industries dragged both Nifty and Sensex down by 1.1% each. Nifty closed down by 266 points at 24,008, slightly below its 200-day moving average of 24,044.25, a bearish sign. The Sensex, which settled 880 points lower at 79,454.47 managed to close slightly above its 200 DMA of 79,114, per Bloomberg data.
FPIs’ changed stance in cash markets on Friday—they sold shares worth a provisional ₹3,798.71 crore—came after sixteen straight sessions of net buying ₹16,473 crore. FPIs also sold index and stock futures worth a net ₹4,346 crore amid escalating tensions, BSE and National Stock Exchange (NSE) data showed. The sale of index futures on Friday once again made them cumulatively net short after two days.
Their cumulative net short index futures positions stood at 7,420 contracts against Thursday’s net long figure of 7,464 contracts.
Until Thursday, FPI activity remained relatively unperturbed by the tensions.
But Friday marked a change in their stance. Their selling on the day shows them to be adopting a cautious stand in light of the rapidly changing situation.
While Domestic Institutional Investors (DII) net purchased cash shares worth ₹7,278 crore , selling by FPIs and retail and high networth investors, whose figures weren’t released until press time, dragged down the markets, per analysts.
However, the Nifty managed to close above the psychological 24,000 level, recovering 0.3% from the day’s low of 23,936.
The Sensex staged a sharper 0.6% recovery from the day low of 78,968.34. But anticipation of escalation over the weekend muted overall investor sentiment.
