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Profit booking, global cues dent equity markets

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  6 July 2016 12:00 AM GMT

Mumbai, July 5: Profit booking, coupled with bearish global cues and a weak rupee on Tuesday subdued the Indian equity markets which closed the day’s trade in the red after six consecutive sessions of gain. With heavy selling pressure witnessed in automobile, banking and information technology (IT) stocks, the wider 51-scrip Nifty of the tiol Stock Exchange (NSE) declined by 34.75 points, or 0.42 per cent, at 8,335.95 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 27,340.72 points, closed at 27,166.87 points — down 111.89 points or 0.41 per cent from the previous close at 27,278.76 points. The Sensex touched a high of 27,348.66 points and a low of 27,127.30 points during the intra-day trade.

The BSE market breadth was tilted in favour of the bears — with 1,497 declines and 1,269 advances.

Both the key Indian indices had ended on a higher note during the previous trade session on Monday to reach their new 2016 closing high levels.

The barometer index had edged up 133.85 points or 0.49 per cent to 27,278.76 points, while the NSE Nifty gained by 42.35 points or 0.51 per cent to 8,370.70 points. Initially on Tuesday, the key indices opened on a lower note, in sync with their Asian peers.

Besides profit booking, lower global crude oil prices and a weak rupee dented investors’ sentiments. The Indian rupee weakened by 19 paise to close at 67.46 against a US dollar from its previous close of 67.27 to a greenback.

Further, upcoming global event risks such as the release of the US FOMC’s (Federal Open Market Committee’s) June meeting minutes, along with US jobs’ data negatively influenced investors’ sentiments.

The minutes assume significance as they can yield cues on when the next rate-hike cycle might start.

Earlier, the US FOMC had decided to maintain its key lending rates. The US Fed siglled its intention to limit the times it might increase key lending rates due to a weak domestic jobs market. A hike in the US interest rates can potentially lead FPIs (Foreign Portfolio Investors) away from emerging markets such as India. In addition, investors’ sentiments were subdued after a key macro-data showed a slowdown in June services sector growth. The Nikkei India Services PMI fell to seven month low to 50.3 for last month from 51 in May 2016.

“Several factors such as profit booking, upcoming release of FOMC minutes and bearish global markets dented the domestic indices,” And James, Chief Market Strategist at Geojit BNP Paribas Fincial Services said. According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, Nifty opened down tracking bearish global cues and couldn’t recover throughout the day on back of some profit booking at higher levels.

“It ended with margil losses. Recovery in USD/INR futures also pressurised the prices in intra-day session,” Desai said. “Most sector stocks traded down either due to profit booking at higher levels or some fresh selling pressure.” In terms of investments, the provisiol data with exchanges showed that the foreign institutiol investors (FIIs) bought stocks worth Rs 265.63 crore, and the domestic institutiol investors (DIIs) sold scrip worth Rs 447.48 crore.

Sector-wise, the S&P BSE automobile index plunged by 217.94 points, followed by the banking index, which declined by 94.33 points; and the IT index edged-down by 56.58 points.

On the other hand, the S&P BSE capital goods index surged by 53.67 points, metal index rose by 34.76 points and healthcare index was up 32.31 points.

Major Sensex gainers during Tuesday’s trade were: Coal India, up 1.35 per cent at Rs 321.75; Tata Steel, up 0.88 per cent at Rs 334.10; Reliance, up 0.64 per cent at Rs 992.95; Larsen and Toubro (L&T), up 0.60 per cent at Rs 1,574.65; and HDFC, up 0.55 per cent at Rs 1,259.30. Major Sensex losers were Gail, down 2.45 per cent at Rs 386.90; Powergrid, down 2.36 per cent at Rs 161.10; Bharti Airtel, down 1.94 per cent at Rs 365.80; NTPC, down 1.86 per cet at Rs 152.60; and Tata Motors, down 1.78 per cent at Rs 460.55. (IANS)

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