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Negative global cues, profit booking subdue equity markets

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  7 May 2016 12:00 AM GMT

Mumbai, May 6: Negative global cues, coupled with profit booking and lower crude oil prices, subdued the Indian equity markets on Friday. This led to key indices of the Indian equity markets ending the day’s trade flat — margilly in the red.

The wider 51-scrip Nifty of the tiol Stock Exchange (NSE) closed lower by 2.05 points, or 0.03 percent, at 7,733.45 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 25,223.67 points, closed at 25,228.50 points — down 33.71 points or 0.13 percent from the previous close at 25,262.21 points.

The Sensex touched a high of 25,260.48 points and a low of 25,057.93 points during the intra-day trade.

The BSE market breadth was tilted in favour of the bears — with 1,421 declines and 1,102 advances.

Both the key Indian indices had ended on a positive note on Thursday. The barometer index had gained 160.48 points or 0.64 percent, while the NSE Nifty had closed higher by 29 points or 0.38 percent.

The key indices opened on a flat-to-negative note on Friday, as investors took cues from Asian markets which traded in the red.

Asian markets remained subdued, as the benchmark indices in Chi and Japan plunged on fears of further decline in global commodity prices.

Further, European markets also traded in the red ahead of the US non-farm payrolls data.

The data assumes significance as it will give vital cues on the direction of the US monetary policy.

Besides, lower crude oil prices dented investors’ sentiments. However, falls were mitigated, as value buying and expectations that key economic legislation will get parliamentary approval supported prices. Value buying was triggered after RBI’s (Reserve Bank of India) proposal for on-tap bank licence.

In addition, banking stocks attracted buyers in the backdrop of Lok Sabha’s nod for the bankruptcy code.

“Negative Asian markets, especially the fall in the Chinese indices dented investors’ sentiments. However, value buying at lower levels supported prices,” And James, chief market strategist, Geojit BNP Paribas Fincial Services, told IANS.

Vaibhav Agarwal, vice president and research head at Angel Broking said that the market breadth which indicates the overall health of the market turned negative.

“In overseas stock markets, Asian and European stocks edged lower as investors turned cautious before the release of the influential US monthly non-farm payroll data,” Agarwal said.

“Investors will closely track the next batch of Q4 (fourth quarter) results in the coming week.”

According to Nitasha Shankar, senior vice president for research with YES Securities, broader markets ended the day’s trade on a mixed note.

“Midcap index ended in the green, while smallcap ended in the red,” Shankar noted.

“Pharma, IT and metal indices ended in the red led by profit booking. PSU bank, auto, FMCG and reality indices ended in the green.”

Both the foreign institutiol investors (FIIs) and domestic institutiol investors (DIIs) turned into net buyers during the day’s trade.

Data with stock exchanges showed that the FIIs bought stocks worth Rs.27.71 crore and the DIIs purchased scrip worth Rs.179.80 crore.

Sector-wise, healthy buying was witnessed in stocks of automobile, consumer durables, and oil and gas. However, scrip of healthcare, IT (information technology) and capital goods came under intense selling pressure.

The S&P BSE automobile index surged by 110.96 points, followed by the consumer durables index, which rose by 81.09 points; and the oil and gas index gained by 63.16 points.

Conversely, the S&P BSE healthcare index plunged by 132.81 points, followed by the IT index, which declined by 83.13 points; and the capital goods index fell by 72.57 points.

Major Sensex gainers during Friday’s trade were GAIL, up 4.99 percent at Rs.384.15; BHEL, up 3.17 percent at Rs.126.75; Asian Paints, up 2.31 percent at Rs.888.40; State Bank of India (SBI), up 2.19 percent at Rs.184.40; and Tata Motors, up 1.92 percent at Rs.398.70.

Major Sensex losers were Dr.Reddy’s Lab, down 2.14 percent at Rs.2,868.20; Wipro, down 1.92 percent at Rs.532.60; Adani Ports, down 1.86 percent at Rs.194.95; ONGC, down 1.21 percent at Rs.208.30; and Lupin, down 1.16 percent at Rs.1,586.60. (IANS)

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