By Indulal PM
MUMBAI (Reuters) - The Nifty fell for a second consecutive session as investors continued to book profits in recent outperformers such as State Bank of India while they wait for actual policies from Prime Minister Narendra Modi and his new cabinet.
Arun Jaitley, who was named as India's new finance minister, committed himself on Tuesday to repairing public finances and restoring investor confidence. The close party colleague of Modi will also share the defence and corporate affairs portfolios, although only temporarily.
The new government will need to meet high investor expectations, as prospects of a victory by the Bharatiya Janata Party had sent the Nifty up by 25.8 percent to record highs since Modi was named as the prime ministerial candidate for the opposition party in mid-September.
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Overseas investors have been especially strong buyers of the rally, but sold a net $14.3 million on Monday, their second session of sales in three, according to provisional exchange data.
"Market is getting into some sort of correction mode now after the election rally. Now the optimism needs to be matched with the fundamentals. I think market will start counting for the next events such as (macro) policy announcements and RBI policy," said Deven Choksey, managing director, KR Choksey Securities.
The broader Nifty closed 0.56 percent lower at 7,318 points, marking only its third daily fall this month.
The benchmark BSE Sensex fell 0.68 percent at 24,549.51 points.
Shares in State Bank of India fell 2.7 percent, adding to their 1.9 percent fall on Monday.
Lenders, especially public sector ones, have been big beneficiaries of the recent rally given expectations they are primed to benefit from a recovering domestic economy. SBI has gained 48.85 percent so far this year.
Other outperformers also fell. Reliance Industries Ltd
Mid-caps, which recently posted strong gains, also slumped. Unitech Ltd
Shares in Gail India Ltd
Shares of sugar refiners slumped as sugar futures fell to their lowest in 10 weeks on sluggish demand from bulk consumers ahead of the monsoon season.
However, investors also picked up shares that under-performed the rally, such as exporters that were seen as vulnerable to a stronger rupee.
Shares in Infosys Ltd
(Editing by Sunil Nair)