MUMBAI: Market benchmark indices Sensex and Nifty drifted lower in early trade on Thursday as relentless foreign fund outflows weighed on investors' sentiment, although cooling crude oil prices that traded below the USD 100 per barrel mark cushioned the fall.
The 30-share BSE Sensex declined 215 points to 72,257.30 in early trade. The 50-share NSE Nifty was down 107.25 points to 22,518.90.
From the 30 Sensex firms, Mahindra & Mahindra, Maruti, UltraTech Cement, Bharat Electronics, Eternal and Asian Paints were the major laggards.
Kotak Mahindra Bank, Infosys, HCL Tech, Tata Consultancy Services and Axis Bank were among the winners.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 10,148.41 crore on Wednesday, according to exchange data.
"The sustained FII selling became intense during the last two trading days when the FIIs sold equity for a total of Rs 20,128 crore. With the US 10-year bond yield rising further to 5.3 per cent, FIIs may continue to sell. An apparent contradiction in the FII activity is that even while selling through the exchanges, they have been consistently investing through the primary market and also buying expensive mid and smallcaps," V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.
Brent crude, the global oil benchmark, traded 0.92 per cent lower at USD 97.13 per barrel.
In Asian markets, South Korea's KOSPI and Japan's Nikkei 225 index quoted higher.
US markets ended mostly lower on Wednesday.
"The domestic market remains under pressure after extending its decline, with September marking the Nifty's steepest monthly fall since March. Foreign selling and elevated global borrowing costs continue to weigh on sentiment, although the easing in crude prices and softer US inflation provide some counterweight," Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, a research analyst firm, said.
Brent crude has eased below the USD 100 mark, offering some relief after the recent surge in energy prices, he added.
On Wednesday, the Sensex declined 48.78 points, or 0.07 per cent, to settle at 72,480.29. The Nifty dropped 95.75 points, or 0.42 per cent, to end at 22,620.45.