Surrendering early gains, the benchmark BSE Sensex on Monday fell by 256 points to settle below 29,000 level due to late selling mainly in banking, oil & gas and FMCG stocks as investors turned cautious days ahead of the Union Budget.
The 30-share index resumed higher at 29,316.58 against last close of 29,231.41 points. The barometer firmed up further to 29,362.96 on initial buying in early trade. However, selling in bluechips like RIL, ITC and SBI in late trade dragged the index down to 28,913.16 before ending at 28,975.11, a loss of 256.30 points or 0.88%.
It had lost 230 points in previous trade on Friday last. All the BSE sectoral indices dropped up to 1.91% due to widespread selling by cautious investors. The 50-share Nifty of NSE also moved down by 78.65 points or 0.89% to finish at 8,754.95.
"Markets started on a weak note ahead of the crucial Budget week dragged by Oil & Gas and Banking Sectors," HBJ Capital Senior Analyst Aamir Mir said.
Reliance Industries fell the most by 2.53% among the Sensex stocks. GAIL fell by 2.22% while Axis Bank lost 2.04%. HDFC, ITC, SBI and Infosys which fell up to 2% were among major losers.
Tata Steel, ONGC, Hindustan Unilever, Bajaj Auto, Tata Power and Hindalco also fell up to 1.87%. Pharma giant Lupin fell by 2.5% after it said that the US Food and Drug Administration has raised concerns over production process at its Pithampur plant. "Falling crude prices, bleak economic outlook by US Fed and relief amidst tensions over Greek economy, mixed sentiments amongst domestic market players due to constant flow of news and events related to union budget kept markets volatile today," said Hiren Dhakan, Associate Fund manager, Bonanza Portfolio.
The stock market may remain volatile this week ahead of the expiry of futures and options February contract on coming Thursday and presentation of budget on Saturday, brokers said.
Foreign portfolio investors sold shares worth a net Rs 89.41 crore in the previous session, as per provisional data released by the stock exchanges.