Profit booking, caution ahead of ECB meet depress markets

MUMBAI, April 21:Profit booking, along with unwinding of long positions ahead of key quarterly results, depressed the Indian equity markets on Thursday. Consequently, the key indices of the Indian equity markets ended the day’s trade flat.

The wider 50-scrip Nifty of the tiol Stock Exchange (NSE) closed margilly in the red. It slipped 2.70 points or 0.03 per cent, at 7,912.05 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE ended flat. It opened at 25,979.68 points, and closed at 25,880.38 points — up just 36.20 points or 0.14 per cent from the previous close at 25,844.18 points.

The Sensex touched a high of 26,080.07 points and a low of 25,783.12 points during the intra-day trade.

The BSE market breadth was tilted in favour of the bears — with 1,524 declines and 1,050 advances.

Both the key Indian indices had ended on a flat note during the previous trade session on Wednesday. The barometer index had gained a mere 27.82 points or 0.11 per cent, while the NSE Nifty, had closed with no change at 7,914.75 points.

Initially on Thursday, the key indices opened on a firm note in-sync with positive Asian indices, especially Japanese exchanges.

Besides, positive domestic macros and expectations of healthy quarterly results lifted prices.

However, gains were ceded due to profit booking and unwinding of long positions.

In addition, investors were seen reluctant to chase prices as negative Chinese indices and upcoming European Central Bank’s (ECB) monetary policy meet dented sentiments.

“The initial gains made on the back of rising crude oil prices, firm Asian stocks and positive domestic macros were ceded due to profit booking and caution ahead of the ECB’s monetary policy announcement,” And James, chief market strategist, Geojit BNP Paribas Fincial Services, told IANS.

“Negative Chinese equities too dented sentiments.”

According to Vaibhav Agarwal, vice president and research head at Angel Broking, global cues could remain volatile considering the US FOMC (federal open market committee) meet later next week.

“In overseas markets, main European markets witnessed a mixed trend ahead of monetary policy meeting from the ECB,” Agarwal said.

“Among indices the Bank Nifty gained by 1.76 per cent on expectations of RBI (Reserve Bank of India) relaxing provisioning by reducing the number accounts in AQR (asset quality review).”

Nitasha Shankar, senior vice president for research with YES Securities, said that broader markets also came under selling pressure as high beta stocks witnessed unwinding of long positions.

“Banking and fincial service sectors outperformed with handsome gains providing support to headline indices,” Shankar noted.

“PSU (public sector undertaking) bank index was up 3.6 per cent. Pharma and metal indices gained margilly in trade. IT (information technology), auto, FMCG (fast moving consumer goods) and reality indices ended in the red as they witnessed profit booking.”

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

Data with stock exchanges showed that FIIs purchased stocks worth Rs 805.42 crore and the DIIs bought scrip worth Rs 65.72 crore.

Sector-wise, healthy buying was witnessed in banking, oil and gas, and healthcare stocks, whereas scrip of IT, capital goods, and consumer durables came under heavy selling pressure.

The S&P BSE banking index augmented by 363.37 points, followed by the oil and gas index, which rose by 63.17 points; and the healthcare index gained by 56.55 points.

In contrast, the S&P BSE IT index declined by 176.91 points, followed by the capital goods index, which receded by 142.75 points; and the consumer durables index fell by 118.97 points.

Major Sensex gainers during Thursday’s trade were ICICI Bank, up 6.26 percent at Rs 253.05; State Bank of India (SBI), up 3.68 per cent at Rs 194.20; Coal India, up 2.89 per cent at Rs 286.70; Axis Bank, up 2.08 per cent at Rs 467.60; and Tata Motors, up 1.83 per cent at Rs 411.45.

Major Sensex losers during the day’s trade were Wipro, down 7.01 per cent at Rs 559.20; BHEL, down 2.86 per cent at Rs 129.05; Hero MotoCorp, down 1.72 per cent at Rs 2,988.50; ITC, down 1.61 per cent at Rs 329.60; and Bajaj Auto, down 1.58 per cent at Rs 2,496.10. (IANS)