Derivatives expiry weighs heavy, Sensex down 119 points

Mumbai, Dec 30: Unwinding of long positions ahead of the derivatives expiry, coupled with profit bookings, subdued Indian equity markets on Wednesday. This led to a barometer index of the Indian equity markets closing the day’s trade deep in the red. It ended lower by 119 points. Initially, both the bellwether indices of the Indian equity markets opened on a flat note in sync with their Asian peers. Nevertheless, expectations that Nifty will breach the 8,000-level mark and a positive close of the US markets on Tuesday due to healthy consumer confidence data pushed up prices.

However, markets soon ceded their gains, as lack of investors’ participation coupled with unwinding of long positions ahead of the futures and options (F&O) expiry depressed sentiments and prompted some investors to book profits at higher levels. Latest data with the stock exchanges showed that the volumes in cash markets across key bellwether indices eased to Rs.17,000 crore on Tuesday. Besides, investors were seen cautious regarding the upcoming third-quarter earnings season which starts from January 14.

The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) ended the day’s trade lower by 119 points, or 0.46 percent.

Similarly, the wider 50-scrip Nifty of the tiol Stock Exchange (NSE) closed in the red. It ended lower by 33 points, or 0.41 percent, at 7,896.25 points. The Sensex of the S&P BSE, which opened at 26,123.87 points, closed at 25,960.03 points — down 119.45 points or 0.46 percent from the previous day’s close at 26,079.48 points.

The Sensex touched a high of 26,130.20 points and a low of 25,939.25 points during the intra-day trade. “Unwinding of long positions ahead of tomorrow’s F&O expiry and profit booking at higher levels dented markets in the day’s trade,” And James, co-head, technical research desk with Geojit BNP Paribas Fincial Services, told IANS. Vaibhav Agarwal, vice president and research head at Angel Broking elaborated that markets continued to trade flat on the back of low volumes, and in the absence of any major trigger. “The broader markets performed better than the benchmarks,” Agarwal cited.

“We expect volumes to remain low over the coming few sessions and markets to continue to remain lacklustre. Corporate earnings and the economic data would be the next major triggers for markets.” The foreign institutiol investors (FIIs) were net buyers in the day’s trade, whereas domestic institutiol investors (DIIs) were net sellers. According to data with stock exchanges, FIIs invested Rs.152.2 crore, while DIIs sold stocks worth Rs.74.41 crore. In spite of foreign inflows into Indian equities, the rupee closed flat during the day’s trade. It closed at 66.39 to a US dollar from its previous close of 66.40 to a greenback. Sector-wise, heavy selling was witnessed in information technology (IT), banking and automobile stocks. The S&P BSE IT index plunged by 133.97 points, banking index receded by 84.22 points and automobile index declined by 55.13 points. On the other hand, metals, fast moving consumer goods (FMCG) and telecom scrip gained. The S&P BSE metal index gained by 20.16 points, FMCG index slightly rose by 9.15 points and telecom index was up by 6.67 points.

Major Sensex gainers during Wednesday’s trade were Tata Steel, up 1.18 percent at Rs.258.15; Tata Motors, up 0.68 percent at Rs.393.50; Dr.Reddy’s Labs, up 0.62 percent at Rs.3,121.40; NTPC, up 0.52 percent at Rs.145.25; and BHEL, up 0.50 percent at Rs.169.50.

The major Sensex losers were Infosys, down 1.60 percent at Rs.1,086.05; Tata Consultancy Services (TCS), down 1.37 percent at Rs.2,418.40; State Bank of India (SBI), down 1.18 percent at Rs.225.80; Maruti Suzuki, down 1.08 percent at Rs.4,588.45; and Reliance Industries, down 1.01 percent at Rs.1,004.85. (IANS)