Weak global cues drag equity markets lower

Untitled-10Mumbai, (IANS) Negative global cues, coupled with profit booking and a fall in crude oil prices, dragged the Indian equity markets lower on Thursday.

This led to the key indices closing the day’s trade in the red, as heavy selling pressure was witnessed in capital goods, banking, fast moving consumer goods (FMCG), consumer durables and metal stocks.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) declined by 86.75 points or 1.10 percent, at 7,783.40 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 25,713.84 points, closed at 25,399.72 points — down 304.89 points or 1.19 percent from the previous day’s close at 25,704.61 points.

The Sensex touched a high of 25,714.56 points and a low of 25,351.99 points in the intra-day trade.

The BSE market breadth was skewed in favour of the bears with 1,644 declines and 901 advances.

Both the key indices had also ended on a lower note during the previous trade session on Wednesday due to negative global cues, profit booking and poor quarterly results.

The barometer index on Wednesday had fallen by 69 points or 0.27 percent, while the NSE Nifty edged down by 20.60 points or 0.26 percent.

Initially, the key indices opened on Thursday on a flat note, in sync with their Asian peers.

The Asian and domestic markets receded on the back of hawkish comments from the US Federal Reserve, which increased the chances of a future rate hike. The US Federal Open Market Committee’s (FOMC) April minutes disclosed that the US central bank might raise key lending rates in June.

A hike is expected to lead FPIs (Foreign Portfolio Investors) away from emerging markets such as India.

Besides, profit booking, lower crude oil prices and a weak rupee eroded investors’ confidence.

However, the equity markets were able to pare some of their losses on the back of value buying at lower levels.

In addition, investors’ sentiments turned slightly positive after the electoral victory of the Bharatiya Janata Party (BJP) in Assam, which could potentially strengthen the central government’s ability to push through economic reforms.

“Nifty50 has broken down the psychological support of 7,800 and price action suggests that bears are gaining momentum,” Dhruv Desai, director and chief operating officer of Tradebulls, told IANS.

“Assembly election results of five states were as expected but market is still digesting the bitter pill of a possible US Fed rate hike in June.”

Vaibhav Agarwal, vice president and research head at Angel Broking said: “Markets ended on a negative note. Volatility ruled the roost as the two key benchmark indices extended losses after staging a recovery from lower level in early afternoon trade.”

According to Nitasha Shankar, senior vice president for research with YES Securities, broader markets underperformed the headline indices, as they gave up their morning gains and terminated in the red.

“All sectorial indices ended in the red led by profit booking, PSU bank index was the major drag,” Shankar noted.

During the day’s trade, the foreign institutional investors (FIIs) turned net sellers, while the domestic institutional investors (DIIs) were net buyers.

Data with stock exchanges showed that the FIIs sold scrip worth Rs.764.58 crore, while the DIIs purchased stocks worth Rs.1,483.65 crore.

Sector-wise, all the 19 sub-indices of the BSE ended in the red.

The S&P BSE capital goods index plummeted by 320.10 points, followed by the banking index, which plunged by 229.49 points; the FMCG index declined by 136.70 points, the consumer durables index receded by 122.86 points, and the metal index slipped by 122.51 points.

Major Sensex gainers during Thursday’s trade were Lupin, up 1.43 percent at Rs.1,655.80; Tata Motors, up 0.70 percent at Rs.387.70; Wipro, up 0.70 percent at Rs.542.70; Maruti Suzuki, up 0.32 percent, at Rs.3,926.85; and Tata Consultancy Services (TCS), up 0.20 percent at 2,555.55.

Major Sensex losers were Adani Ports, down 6.14 percent at Rs.171.85; State Bank of India (SBI), down 4.05 percent at Rs.172.90; Larsen and Toubro (L&T), down 3.24 percent at Rs.1,267; HDFC, down 2.61 percent at Rs.1,176.70; and GAIL, down 2.50 percent at Rs.371.90.

Medaram Jathara

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