MUMBAI (Reuters) - The BSE Sensex snapped a four-day winning streak on Wednesday to post its biggest fall in two weeks as auto shares such as Tata Motors were hit by weak March sales, while recent outperformers such as Larsen & Toubro retreated.
Prime Minister Manmohan Singh's speech earlier in the day urging business leaders to keep faith in his government's efforts towards improving a dire investment climate failed to bolster market sentiment as he did not give concrete measures towards recovery. (Read full story here)
Singh’s comments also failed to resonate given continued political uncertainty and worries about early elections after the withdrawal of a key regional ally from the ruling coalition last month, dealers said.
A redeeming factor has been foreign institutional inflows of over $10 billion so far this year.
“The sentiment is cautious at this point. Given the political situation, some more downside is possible,” said G. Chokkalingam, Executive Director & Chief Investment Officer, Centrum Wealth Management.
“It seems like even the FII investments this year also look at risk of being pulled out,” he said.
The Sensex fell 1.26 percent, or 239.31 points to 18,801.64 points, posting its biggest daily percentage fall since March 19 and erasing a good chunk of its 1.9 percent gain over the past four previous trading sessions.
The Nifty ended down 1.31 percent, or 75.20 points to 5,672.90.
Auto shares were among the leading decliners amid continued concerns after companies posted declines in sales in March from a year earlier.
Recent outperformers fell, with Larsen & Toubro (LART.NS) down 3.2 percent after adding 4.3 percent in the previous four sessions.
Tata Consultancy Services Ltd (TCS.NS) shares fell 1.5 percent, and have fallen 2.1 percent in April on worries about their January-March earnings.
However, Adani Power Ltd (ADAN.NS) ended nearly 9 percent higher after regulators allowed it to raise tariffs for electricity on a temporary basis, in a ruling that could boost other firms grappling with erratic fuel supplies.
Reliance Communications Ltd (RLCM.NS) gained 1.6 percent, extending gains a day after entering into a pact with a unit of brother Mukesh Ambani’s Reliance Industries Ltd (RELI.NS) on Tuesday, for sharing the company’s optic fibre network.
Additional reporting by Abhishek Vishnoi; Editing by Sunil Nair