Sensex set for 5th straight fall; IT stocks down

The BSE Sensex is on course for a fifth straight fall, while the broader Nifty traded close to its crucial support of 6,130 levels. The Sensex has now shed nearly 500 points in five sessions.

Foreign flows are on watch after overseas investors sold Rs 396 crore worth of index futures on Monday, adding to Friday's selling of Rs 608 crore. Dealers said outstanding positions in index futures have reduced by 24,631 contracts implying foreign investors are seen unwinding some of the long positions in Nifty futures and Bank Nifty futures.

The BSE Sensex rose 8.9 per cent and hit a record high in 2013 despite slowing growth and sticky inflation on back of over $20 billion worth buying in stocks during the period.

Tirthankar Patnaik of Religare Capital Markets told NDTV that from a macro perspective, nothing much has changed. However, there are fears that emerging markets may have received a lower allocation from FIIs this year.

"We may see weaker participation from foreign investors and that's why Indian markets are not holding up," Mr Patnaik added.

Declines were led by IT stocks, with the BSE IT benchmark falling 1.3 per cent. Infosys shares extended fall and traded 1.72 per cent lower. The company will report its December quarter earnings on Friday.

Anil Manghnani of Modern Stock Brokers told NDTV that because of the excess rally in IT stocks, markets are overweight in IT as we enter the earnings season. We might be seeing a little bit of profit taking in IT stocks, he added.

Metal, energy, power and realty shares also came under selling pressure.

As of 03.15 p.m., the Sensex traded 96 points lower at 20,691, while the Nifty traded 30 points down at 6,162.