Indian shares fell for the second straight session on Monday, dragged down by heavyweights such as Reliance Industries and financial stocks, as caution prevailed ahead of the federal budget due on February 28. Other bluechip stocks such as ITC Ltd, Housing Development Finance Corp Ltd and State Bank of India were also under selling pressure.
The benchmark BSE index closed down 0.88 percent at 28,975.11, while the broader NSE index fell 0.89 percent to 8,754.95. During Monday's midday trade shares recovered led by technology stocks on value buying while metals and mining companies such as Sesa Sterlite surged after the completion of first round of coal block auctions.
However, broader gains were limited as investors were cautious ahead of the federal budget due on February 28, while selling pressure seen in stocks such as DLF Ltd and Jindal Steel and Power as they will be replaced from the broader NSE index from March 27. The budget session of parliament started on Monday and market participants are hopeful of faster reforms in the government's 2015/16 fiscal budget.
"We expect markets to trade sideways. The sentiment is bullish and we do expect there could be measures to reassure economic growth," said Suresh Parmar, head, institutional equities at KJMC Capital Markets. Technology stocks gained on value-buying as investors seen some of the stocks were under-owned. Tata Consultancy Services added 1.6 percent while Infosys gained 0.4 percent.
Metals and mining companies surged after the successful completion of the country's first auction to sell mines. Sesa Sterlite added 2.4 percent, while Hindalco Industries gained 1.3 percent. Indian shares snapped a seven-day rally on Friday as sentiment for bluechips was hit after foreign investors sold index derivatives.
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