Profit booking arrests markets' gaining streak, Sensex down 190 points

Mumbai, October 8: Profit booking, coupled with weak global cues and caution over the upcoming quarterly results, arrested the six-day upward streak of an Indian equities’ barometer which closed 190 points or 0.70 percent down on Thursday. The Indian equity markets, which had rallied for the past six consecutive sessions till Wednesday, receded following uncertainty over the upcoming Bank of England’s rate hike decision. The barometer 30-scrip sensitive index (S&P Sensex) of the Bombay Stock Exchange (BSE) had gained a total of 1,418.97 points since September 29, when the Reserve Bank of India (RBI) announced cuts in key lending rates by 50 basis points.

On Thursday, the wider 50-scrip Nifty of the tiol Stock Exchange (NSE) closed the day’s trade in the red after nine consecutive sessions of gains. It closed lower by 48.05 points or 0.59 percent at 8,129.35 points.

The barometer S&P BSE Sensex, which opened at 27,116.86 points, closed at 26,845.81 points — 190.04 points or 0.70 percent down from its previous close at 27,035.85 points. The Sensex touched a high of 27,120.11 points and a low of 26,762.36 points in the intra-day trade. The rupee also came in for a beating on Thursday. It got depreciated by nine paise to close at 65.05 to a US dollar from its previous close of 64.96 to a greenback. On Wednesday the rupee closed at an eight-week high of 64.96 to a US dollar. Both the domestic, as well as foreign investors were net sellers in the day’s trade. According to data with stock exchanges, the domestic institutiol investors (DIIs) were net sellers in the cash market segment on Thursday, they sold shares worth Rs.299.75 crore.

The foreign institutiol investors (FIIs) sold shares worth Rs.48.89 crore in the day’s trade. Alysts said the markets fell on the back of profit bookings after six consecutive days of rise and were subdued due to investors’ anxiety before the release of second-quarter results.

“Profit booking was witnessed after the six-session rally. Investors were also cautious over the upcoming earnings season — this impacted the markets’ sentiment,” And James, co-head, technical research desk with Geojit BNP Paribas Fincial Services, told IANS.

James pointed out that caution also prevailed ahead of the release of the US Fed’s FOMC (Federal Open Market Committee) minutes and the Bank of England’s (BoE) monetary policy review. The minutes are of the September 16 meeting in which the US Fed decided not to hike lending rates. “The FOMC minutes could throw insights on the stance taken by the US Fed. If the comments are dovish, or in anyway push the rate hike possibilities until late into 2016, strengthening can be expected in both the equities and currency markets,” James said.

The minutes might also give guidance for this month’s FOMC meeting scheduled for October 27-28. With higher interest rates in the US, the FPIs (Foreign Portfolio Investors) are expected to be led away from emerging markets such as India. “The BoE’s policy decision is also being closely monitored by the investors. Any decision from the BoE will give further guidance to the US Fed’s moves,” James added.

Nitasha Shankar, vice president, research with YES Securities, told IANS: “Indian markets ended margilly lower as it failed to cross the upper end of the trading band, triggering a profit booking.”

“Advance decline ratio was margilly in favour of the bears throughout the day. All major sectors witnessed profit taking led by the fast moving consumer goods (FMCG) and banking stocks.”

Sector-wise, healthcare, banking, automobile, capital goods and FMCG stocks came under intense selling pressure. However, consumer durables and metal sectors maged to stay a float. The S&P BSE healthcare index plunged by 182.95 points, banking index receded by 155.78 points, automobile index declined by 96.37 points, capital goods index was lower by 88.56 points and FMCG index dropped by 83.22 points. The S&P BSE consumer durables index gained 27.54 points and metal index rose by 23.86 points.

Major Sensex gainers during Thursday’s trade were: Vedanta, up 2.37 percent at Rs.92.85; Tata Steel, up 1.56 percent at Rs.240.50; BHEL, up 0.57 percent at Rs.203.85; Dr.Reddy’s Lab, up 0.48 percent at Rs.4,216.40; and Tata Motors, up 0.48 percent at Rs.342.85.

The major Sensex losers were: Reliance Industries down 2.70 percent at Rs.889.15; Gail, down 2.52 percent at Rs.305.25; ITC, down 2.06 percent at Rs.339.15; ICICI Bank, down 1.57 percent at Rs.278.45; and NTPC, down 1.41 percent at Rs.125.95. (IANS)