Sensex's 7-day rally ends as oil stocks fall

Decline led by sharp 3% fall in Reliance Industries

Indian shares ended a seven-day gaining streak on Friday, led by a sharp decline in index heavyweight Reliance Industries (RIL), after its employee was among the five people arrested in the corporate espionage case. The BSE Sensex ended 0.78 per cent, or 230 points, lower at 29,231.41, while the 50-share Nifty index fell 0.69 per cent, or 61 points, to 8,833. Shares of RIL fell 3.1 per cent to Rs 873 apiece.

On Thursday, the oil ministry was rocked by a scandal involving the leakage of official documents by government employees and other officials.

The entire pack of oil & gas sector stocks witnessed a decline on the back of document-leak scandal. Indian Oil was down 2.7 per cent, ONGC fell 0.7 per cent, and Castrol India was down 0.9 per cent.

 

"The leaking of the documents acted as a trigger for investors who were looking to book profits in the sector. Over the past several months, many of the oil & gas stocks had risen quite significantly and stocks had become expensive," said Dipen Shah, head of private client group research at Kotak Securities.

The decline in the market was also attributed to heavy-selling in the index derivatives, analysts said.

"Some amount of heavy-selling was seen in index derivatives towards the end of the day. This could be a part of the pre-Budget hedging by traders and investors," said Daljeet Singh Kohli, head of research at IndiaNivesh Securities.

However, others such as Siddharth Bhamre of Angel Broking believe the quantum of selling was not unusual and should be seen in the context of the rise seen in the past seven trading sessions.

"The markets had been rising continuously for the past seven sessions. So some amount of profit-booking was expected. The selling was not extraordinary because at no point did the index fall by more than one per cent," said Bhamre, who heads the derivatives analysis at Angel Broking.

Analysts said the mood going into the Budget was optimistic and there was very little cause for nervousness. "People have high expectations from the Budget, but that does not mean people are nervous and will look to pare positions aggressively. There could be some risk-aversion at higher levels as the Budget draws closer. But overall, the sentiment remains positive," said Shah.

On Friday, foreign portfolio investors were net-sellers at Rs 89 crore while domestic institutional investors were net-buyers for Rs 204.85 crore.

On the BSE, one stock fell for every stock that gained. All sectoral indices, except the realty, consumer durables, fast-moving consumer goods and healthcare indices, ended the day in the red.