Karnataka uncertainty makes Sensex end in red

Mumbai: The equity markets closed lower for the second consecutive day as the lingering uncertainty over the composition of the next government in Karnataka along with weakness in global stocks impacted sentiments. Meanwhile, the Indian rupee recovered from its 15-month low hit on Tuesday following suspected intervention by the Reserve Bank of India (RBI).

However, forex participants did not rule out the possibility of rupee touching 70-level mark against the US dollar in the coming months as the underlying sentiments still remains weak.

Extending its fall for the second straight session, the Nifty slumped 10,741.10, down 60.75 points or 0.56 per cent to end the day at 10,741.10 while the Sensex fell 156.06 points or 0.44 per cent to end the day at 35,387.88.  

“Overall from a macro standpoint, the Karnataka state elections are a slight disappointment.  Whether or not the BJP forms a government in Karnataka, the swift alliance between Congress and JD(S) to keep the BJP out of power is a stark reminder of what could transpire going into 2019 general elections as a number of disparate regional powers with different priorities may come together to form a non-BJP coalition. We expect political uncertainty to rise because of the heavy election calendar. This along with rising oil prices suggest caution on the macro front,” said Nomura Financial Services in a note to its clients.  

The rupee climbed 0.46 per cent to end the day at 67.80 per dollar. On Tuesday, the local currency slipped below the crucial 68-level marks for the first time since January 2017 to close at 68.11.   

According to the provisional data released by the stock exchanges, foreign portfolio investors (FPI) sold shares worth Rs 699.22 crore.