New Delhi, February 22: Indian stock indices traded in the red for the second straight session, after snapping a six-session winning streak in the previous session. The latest decline could be attributed to profit booking and concerns among investors over high stock valuations.

At 11.10 am, Sensex was at 72,239.61 points, down 383.48 points or 0.53 per cent, while Nifty was at 21,933.50 points, down 121.55 points or 0.55 per cent. Among the widely-tracked Nifty 50 stocks, 13 advanced and the rest 37 declined at the time of filing this report. India PC Market Drops 6.6% in 2023 to 13.9 Million Units, HP Leads: Report.

"An important trend now is the huge delivery based buying in the private banks, which are even now attractively valued in this market with elevated valuations. Switching from overvalued mid- and small caps to large private banks would be a smart move," said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Continued selling of Indian stocks by foreign portfolio investors coupled with high stock valuations, were, among some of the concerns for the investors. Such aspects will continue to be on top of investors' minds. Indian AI Market Likely To Reach ‘USD 17 Billion’ by 2027, AI Investment and Demand for Talent To Grow: Report.

Foreign portfolio investors have been aggressively selling Indian stocks, turning net sellers in the Indian equity market so far in 2024, after making a beeline to accumulate domestic stocks during November and December. After selling stocks worth Rs 25,744 crore in January, they have so far sold some Rs 630 crore in February. The selling spree has somewhat softened.

"The Indian market is facing stiff resistance at higher levels; the valuation of a broader index is at a significant premium, leading to an unfavourable risk reward, which influences investors to book profits," said Vinod Nair, Head of Research, Geojit Financial Services. "Concerns lingered since investors were heavily betting on a US Fed rate cut, which is put at risk by January's higher-than-expected inflation," Nair added.