Stock market update: Markets decline in early trade on weak trends from Asian peers, foreign fund outflows

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Equity benchmark indices Sensex and Nifty declined in early trade on Wednesday amid continuous foreign fund outflows, weak trends from Asian markets and selling in banking stocks.

The 30-share BSE Sensex declined 138.58 points or 0.17 per cent to 80,664.28 in early trade. The NSE Nifty snapped its four-day rally and slipped 15.20 points to 24,683.65, reported PTI.

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From the 30 Sensex firms, UltraTech Cement, Kotak Mahindra Bank, Tech Mahindra, ICICI Bank, HDFC Bank, IndusInd Bank, Power Grid and Axis Bank were the laggards.

Larsen & Toubro, Bharti Airtel, Nestle India, Hindustan Unilever, Bajaj Finserv and Adani Ports were among the gainers.

In Asian markets, Tokyo, Shanghai, Hong Kong and Seoul were trading lower on Wednesday. The US markets settled lower on Tuesday.

Foreign Institutional Investors (FIIs) again turned sellers on Tuesday as they offloaded equities worth Rs 1,457.96 crore, according to exchange data, reported PTI.

Domestic Institutional Investors (DIIs) bought equities worth Rs 2,252.10 crore on Tuesday, reported PTI.

"The trend of FII selling and DII buying continues. But the fall in the dollar index has the potential to arrest the trend of FII outflows. But big FII investment will happen only if Indian valuations correct, which appears unlikely in the present context of sustained domestic inflows, V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, told PTI while sharing an update on stocks market update.

Despite high valuations the undertone of the market continues to be bullish, Vijayakumar added.

Global oil benchmark Brent crude declined 0.11 per cent to USD 77.09 a barrel, reported PTI.

The 30-share BSE Sensex rebounded 378.18 points or 0.47 per cent to settle at 80,802.86. Rising for the fourth consecutive session, the NSE Nifty surged 126.20 points or 0.51 per cent to 24,698.85, reported PTI.

Meanwhile, the Indian rupee depreciated by 7 paise to 83.84 against the US dollar in early trade on Wednesday, tracking subdued domestic equity market trend and unabated outflow of foreign capital, reported PTI.

A weak American currency and lower crude prices, however, supported the local unit and prevented its sharp fall, forex traders said.

At the interbank foreign exchange, the rupee opened weak at 83.79 and lost further to 83.84 against the greenback, declining 7 paise from its previous days' closing level of 83.77, reported PTI.

The rupee settled 10 paise higher at 83.77 against the American currency on Tuesday, a day after gaining 8 paise.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading marginally higher by 0.02 per cent to 101.31.

(With inputs from PTI)