The Sensex fell on Thursday, led by ICICI Bank which was hit by profit-taking after beating earnings forecasts, while the expiry of January derivatives kept trading volatile towards the end of the session.
The BSE index added 2.4 per cent in January to post its third-straight monthly gain and its longest winning streak since gaining for four consecutive months from June to September in 2010. The gains were sparked by strong continued foreign net inflows, which reached Rs 20,810 crore as of January 30.
Analysts attribute January's gains to the government's efforts at additional fiscal reforms, but shares have fallen 1.04 per cent since the central bank disappointed on Tuesday with a cautious stance on interest rates despite cutting them for the first time in nine months.
The outlook for stocks largely depends upon how the government handles its current account deficit and how the budget pans out.
The benchmark BSE Sensex fell 0.55 per cent, or 110.02 points, to end at 19,894.98, a shade below the psychologically important 20,000 mark.
The broader Nifty fell 0.35 per cent, or 21 points, to end at 6034.75 on the last day of derivatives expiry.
January derivatives expired on Thursday. The last day of these contracts can typically lead to volatility in cash markets, especially towards the end of the session.
Dealers are now watching for earnings of companies like Bharti Airtel, Bhel and auto sales numbers for sectoral cues.