Global cues, profit booking drag equity markets lower (Roundup)

Negative global cues, coupled with profit booking and disappointing macro-data, dragged the Indian equity markets lower on Wednesday.

Investors were seen reluctant to chase prices on the back of speculation over a curtailment of stimulus measures by the European Central Bank (ECB).

The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged down by 25.20 points, or 0.29 per cent, to 8,743.95 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 28,425.74 points, closed at 28,220.98 points -- down 113.57 points, or 0.40 per cent, from the previous close at 28,334.55 points.

The Sensex touched a high of 28,477.65 points and a low of 28,188.90 points during the intra-day trade.

 

In contrast, the BSE market breadth was tilted in favour of the bulls -- with 1,743 advances and 1,133 declines.

On Tuesday, both the key Indian indices ended in the green due to short covering and value buying on the back of positive global cues, and reduction in a key lending rate by the Reserve Bank of India (RBI).

The barometer index had gained 91.26 points, or 0.32 per cent, while the NSE Nifty rose by 31.05 points, or 0.36 per cent.

Initially on Wednesday, the benchmark indices opened on a higher note in sync with their Asian peers.

Besides, the announcement made on Tuesday by the newly-constituted Monetary Policy Committee (MPC), headed by RBI Governor Urjit Patel, to cut a key lending rate by 25 basis points provided some boost to the domestic markets.

In addition, the markets were provided a relief by the International Monetary Fund (IMF) forecast of India's growth to be raised by 0.2 percentage points to 7.6 per cent for 2016-17 and 2017-18.

However, disappointing macro-data, which showed that India's private sector economy lost momentum in September, hampered the risk-taking appetite.

While the Nikkei Markit India Composite PMI (Purchasing Managers' Index) Output Index declined to 52.4, the seasonally adjusted Nikkei India Services Business Activity Index, too, registered a slower rate of expansion at 52 in September.

In addition, the global markets, especially the European markets remained subdued over speculation on curtailment of stimulus measures by the ECB.

Further, profit booking and a depreciation in the rupee also added to the downward trajectory.

The Indian rupee weakened by three paise to 66.50 against a US dollar from its previous close of 66.47 to a greenback.

"Investors were seen reluctant to chase prices after several days of rise," Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.

"Negative European markets and disappointing Services PMI figure, too, dragged the key indices lower."

According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, the CNX Nifty traded with sideways to bearish sentiments throughout the session on profit booking at higher levels.

"IT and banking stocks failed to sustain at higher levels. Pharma and auto stocks traded with sideways sentiments due to profit booking," Desai said.

"Oil-gas and aviation stocks traded down in the second half of the session on profit booking at higher levels from traders. FMCG, power and cement stocks managed to hold the early gains throughout the session on fresh buying support."

In terms of investments, provisional data with exchanges showed that the foreign institutional investors (FIIs) purchased stocks worth Rs 243 crore, whereas the domestic institutional investors (DIIs) divested scrip worth Rs 349.86 crore.

Sector-wise, the S&P BSE banking index plunged 175.92 points, followed by the IT index, which declined by 57.25 points, and the healthcare index fell by 56.27 points.

In contrast, the S&P BSE automobile index surged by 79.48 points, the metal index rose by 69.48 points, and the capital goods index gained by 27.73 points.

Major Sensex gainers during Wednesday's trade were: Tata Motors, up 1.59 per cent at Rs 558.10; Asian Paints, up 1.39 per cent at Rs 1,208.85; Hindustan Unilever (HUL), up 1.32 per cent at Rs 871.30; NTPC, up 0.63 per cent at Rs 152.75; and the State Bank of India (SBI), up 0.50 per cent at Rs 260.55.

Major Sensex losers were: ONGC, down 2.56 per cent at Rs 266.75; Axis Bank, down 2.03 per cent at Rs 535.70; Bajaj Auto, down 1.28 per cent at Rs 2,857.20; Hero MotoCorp, down 1.17 per cent at Rs 3,490.40; and Mahindra and Mahindra (M&M), down 1.16 per cent at Rs 1,398.90.

--IANS

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