Sensex slips below 26,000

Indian shares fell for a seventh session on Thursday, their longest losing streak in one-and-a-half years, as blue-chips such as State Bank of India (SBI) and Infosys continued to be hit by foreign selling. The Sensex fell one per cent to 25,979.60, while the Nifty closed 1.02 per cent lower at 7,979.10. SBI fell 2.17 per cent while Infosys ended 1.7 per cent lower.

The country’s cash crunch continued to weigh on corporate earnings expectations for the December quarter as the Nifty fell below the 8,000-mark for the first time since November 25.

The seventh straight session of declines is the longest losing streak in 18 months. The index last recorded a seven-day losing streak in June 2015, when the India Meteorological Department cut its forecast for monsoon rainfall for the year.

Indian shares, like their regional counterparts, have taken a hit due to the Federal Reserve’s hawkish US interest rate forecast last week that led to foreign selling in emerging markets. Foreign institutional investors have sold a net $414 million in shares this month as of December 21. Analysts said investors were booking profits due to a lack of a clear domestic triggers and persisting worries about the impact from a ban on higher value banknotes on the economy and corporate profits.

“There is no clarity in the expectations of earnings routes for investors,” said Saurabh Jain, assistant vice-president of research at SMC Global Securities. “Due to demonetization, earnings for the December quarter are expected to be tepid, and there are also expectations that the impact could be carried into the next financial year.”