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Indian stocks fell on Tuesday, after a sharp rise in the previous session, weighed down by the financial sector after Bajaj Finance’s asset quality worsened in the December quarter.
The blue-chip NSE Nifty 50 index was down 0.16% at 21,702.60 points and the S&P BSE Sensex was down 0.29% at 71,731.20, at 11:04 am IST.
“Unsustainable valuations and cooling earnings across segments continue to be concerning for the market,” said Dipan Mehta, founder and director of Elixir Equities.
“After key events like the (India) budget and Federal Reserve policy this week, we see scope for a correction, a timing correction or a price correction,” Mehta added.
The Indian government will announce the federal budget on Thursday.
Financial services, the most heavily weighted sector of the top 13, fell 0.5%.
Bajaj Finance lost around 5% to hit a five-month low and was the top loser in the Nifty 50. The company posted a smaller-than-expected rise in its quarterly profit, while its asset quality deteriorated.
“Given the deterioration in asset quality, the cost of credit is likely to remain elevated in the near term,” analysts at Ambit Capital said.
Information technology stocks rose 0.85% ahead of the US Federal Reserve’s rate decision and comments, due on Wednesday.
The Fed’s comment will provide clues on the path of rates and influence US Treasury yields and the strategy of foreign investors.
The oil and gas index gained 1.5%, led by a 3% rise in Bharat Petroleum Corporation.
The state-owned oil marketing company reported stronger-than-expected December quarter earnings, helped by strong refining and marketing margins, during market hours on Monday, triggering a 3.85% jump.
Power generating company NTPC lost around 3% as it reported a drop in revenue in the December quarter.
KEC International rose 3% as it secured new orders worth Rs 13.04 billion ($156.87 million) across its businesses.