Disappointing macro data depresses equity markets

Mumbai, June 14: Disappointing macro-economic inflation data, along with negative global cues, depressed the Indian equity markets on Tuesday. Consequently, the key indices of the Indian equity markets closed flat, after a late-hour sharp recovery led by value buying pared some of the day’s losses.

The wider 51-scrip Nifty of the tiol Stock Exchange (NSE) dipped by 1.75 points or 0.02 per cent, at 8,108.85 points. The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 26,482.50 points, closed at 26,395.71 points — down 1.06 points from the previous close at 26,396.77 points.

The Sensex touched a high of 26,485.45 points and a low of 26,264.81 points during the intra-day trade. The BSE market breadth was skewed in favour of the bears — with 1,546 declines and 952 advances.

Both the key indices had ended on a lower note during the previous trade session on Monday. The barometer index had fallen by 238.98 points, or 0.90 per cent, while the NSE Nifty had slipped by 59.45 points or 0.73 per cent. In terms of broader markets, both the midcap and smallcap indices closed higher by 0.18 and 0.54 per cent respectively.

Initially on Tuesday, the key indices opened on a flat-to-positive note, in sync with their Asian peers and a lower close of the US stock on Monday. Investors were disappointed as macro-economic inflation data — Consumer Price Index (CPI) — which was released after market hours on Monday showed an upward trajectory. Even the other major domestic macro-economic inflation data — Wholesale Price Index (WPI) — stroked volatility, as it showed a second straight month of rise.

Further, investors were seen cautious ahead of the US FOMC’s (Federal Open Market Committee) rate setting meet. A hike in the US interest rate is expected to lead FPIs (Foreign Portfolio Investors) away from emerging markets such as India.

Besides the US FOMC, the Bank of Japan (BoJ) and the Bank of England are slated to conduct their monetary policy meets this week. In addition, lower crude oil prices and a weak rupee dented key indices. The Indian rupee weakened by 14 paise during the day’s trade. It closed at 67.27-28 against a US dollar from its previous close of 67.14 to a greenback.

However, a late spurt of value buying at lower levels and firm buying support to the banking sector after RBI (Reserve Bank of India) allowed debt recast of large accounts, aided equity markets to pare its losses. Investors were seen buoyed by the expectations of a positive outcome from Fince Minister Arun Jaitley’s meet with state fince ministers on the GST (Goods and Services Tax) bill.

“Disappointing macro-economic inflation data, lower crude oil prices, weak rupee and upcoming US-Japan monetary policy announcements hit the risk taking appetite of investors,” And James, Chief Market Strategist, Geojit BNP Paribas Fincial Services, told IANS.

“However, firm buying support for the banking stocks, value buying and positive expectations from the fince ministers’ meet on GST helped markets recover.”

According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, Nifty traded with volatile sentiments due to some short covering from lower levels.

“Nifty recovered from day’s low in second half of the session due to profit booking at higher levels in USD/INR prices,” Desai pointed out.

“IT sector stocks traded with margil loss on lack of buying support at higher levels. Nifty held the crucial level of 8,100 in intra-day session and settled above the same.”

Nitasha Shankar, Senior Vice President for Research with YES Securities, said that volatility continued to domite Indian markets for the second consecutive session ahead of the much awaited US Fed meet.

“Active participation was witnessed in the broader markets which outperformed the headline indices,” Shankar noted.

“PSU bank and realty indices surged in trade after witnessing profit booking yesterday.”

Both the foreign and domestic institutiol investors (DIIs) were net sellers during the day’s trade. Data with stock exchanges showed that the FIIs (foreign institutiol investors) sold stocks worth Rs 113.36 crore, whereas DIIs offloaded scrip worth Rs 32.27 crore.

Sector-wise, healthy buying was witnessed in stocks of banking, healthcare and consumer durables, whereas scrip of oil and gas, information technology (IT) and technology, entertainment and media (Teck) witnessed heavy selling pressure.

The S&P BSE banking index surged by 82.10 points, followed by the healthcare index, which rose by 75.89 points and the consumer durables index gained by 47.88 points. On the other hand, the S&P BSE oil and gas index slipped by 48.73 points, followed by the IT index, which declined by 46.87 points, and the Teck index fell by 22.34 points.

Major Sensex gainers during Tuesday’s trade were Cipla, up 2.77 per cent at Rs 482.20; Adani Ports, up 2.67 per cent at Rs 207.85; State Bank of India, up 2.65 per cent at Rs 207.55; ITC, up 0.96 per cent at Rs 353.30; and Tata Motors, up 0.93 per cent at Rs 448.40. Major Sensex losers during the day’s trade were Bajaj Auto, down 1.00 per cent at Rs 2,561.20; Hero MotoCorp, down 0.91 per cent at Rs 3,011.55; Asian Paints, down 0.89 per cent at Rs 985.65; Hindustan Unilever, down 0.85 per cent at Rs 866.75; and Maruti Suzuki, down 0.75 per cent at Rs 4,104.55. (IANS)