New Delhi: The 30-scrip Sensitive Index (Sensex) and broader 50-scrip Nifty on National Stock Exchange (NSE) extended losses from January 21 and declined sharply during early trade on Monday primarily due to sell-off by foreign institutional investors.
This is the fifth consecutive decline in sessions for the indices. At 10.20 a.m., Sensex traded at 58,58,402 points, down 1.1 per cent or 635 points from the previous close of 59,037 points. It opened at 59,023 points.
Nifty traded at 17,423 points, down 1.1 per cent or 193 points from the previous close of 17,617 points. It opened at 17,575 points. Divi's Labs, Bajaj Finance, Wipro, JSW Steel, and Tech Mahindra were some of the top losers, NSE data showed. Top gainers during the early trade were Cipla, ONGC, Sun Pharma, ICICI Bank, and Bharti Airtel.
"The heightened tensions in the Russia-Ukraine border is a major geopolitical concern.FIIs again turning big sellers is a major headwind. Investors have to move cautiously," said V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
"An important feature of the tech sell-off is that bulk of the selling is happening in non-profitable tech stocks. This trend is impacting stocks like Zomato and Paytm in India too."
Shares of online food aggregator Zomato extended their losses from last week and declined 18 per cent in early trade on Monday apparently due to low valuations. Over the past one-month period, Zomato's shares fell nearly 30 per cent. Listed in July 2021, Zomato shares are, however, up more than 20 per cent from its IPO issue price of Rs 76. At 12.43 p.m. on Monday, it was at Rs 93 per share.
"Zomato is witnessing a vertical fall and slipped below the low made on a listing day which is not a good sign for any counter. There is a risk-off situation across the globe amid fear of tightening by the US Fed where if we look at the trend then there is a sharp sell-off in growth stocks (new edge businesses) especially loss-making companies," said Santosh Meena, Head of Research at Swastika Investmart.
"Many new edge companies came out with unrealistic valuations amid euphoria in the market but we know that only a few companies will survive in the long run and I believe Zomato has the potential to perform in the long run." The ongoing correction is leading to stock at a reasonable valuation where aggressive investors can use it as a buying opportunity with a long-term view, he added.
The company's market capitalisation fell below the 1 lakh crore mark last week and on Monday morning it was at Rs 73,085 crore, NSE data showed.
IANS
