Profit booking drags equity markets lower

sensexMumbai (IANS) : Profit booking, along with upcoming global event risks and the logjam in parliament, dragged the Indian equity markets lower on Thursday.

Consequently, the key indices closed the day’s trade in the red, as heavy selling pressure was witnessed in banking, capital goods and automobile stocks.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged down by 55.75 points or 0.65 per cent to 8,510.10 points.

The barometer 30-scrip sensitive index (Sensex) which opened at 27,980.07 points, closed at 27,710.52 points — down 205.37 points or 0.74 per cent from the previous close at 27,915.89 points.

It touched a high of 27,988.76 points and a low of 27,687.54 points during the intra-day trade.

The BSE market breadth was tilted in favour of the bears — with 1,646 declines and 1,041 advances.

On Wednesday, the benchmark indices ended in the green, prompted by value buying and healthy inflow of foreign funds. The barometer index closed higher by 128.27 points or 0.46 per cent, while the Nifty edged up by 37.30 points or 0.44 per cent.

Initially on Thursday, the benchmark indices opened on a positive note, in sync with their Asian peers, especially the Japanese markets.

Besides, the equity markets were pushed up by higher global crude oil prices, firm rupee and healthy progress of monsoon season.

In the day’s trade, the Indian rupee strengthened marginally to 67.17-18 against a US dollar from its previous close of 67.20 to a greenback.

However, the equity markets soon ceded their gains on the back of sector-specific profit booking and weak European markets.

In addition, reduced chances of the European Central Bank (ECB) further easing its monetary policy in its upcoming monetary policy review dampened investors’ sentiments.

The ongoing logjam in parliament also hampered the upward trajectory.

“Investors have been hesitant in chasing prices higher due to major event risks that are lined up like the ECB’s upcoming monetary policy meet, passage of the GST bill and the upcoming quarterly results, especially from the banking majors,” Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.

Dhruv Desai, Director and Chief Operating Officer of Tradebulls, pointed out that Nifty and Bank Nifty both witnessed selling pressure and traded down throughout the trading session.

“Banking, pharma and auto sector stocks traded with mix sentiments due to selling pressure,” Desai noted.

“FMCG (fast moving consumer goods) sector stocks traded with sideways to firm sentiments on some buying support at lower levels from traders.”

According to Nitasha Shankar, Senior Vice President for Research with YES Securities, weak quarterly earnings fuelled the late sell-off which dragged the bank index sharply lower.

“Midcap and smallcap indices also ended sharply lower led by profit booking. All major sectoral indices ended lower. FMCG and IT (information technology) outperformed marginally ending in the green,” Shankar said.

“Cement stocks surged led by ACC and Ambuja stocks after cabinet approved Ambuja acquisition of 24 per cent of shares in Holcim India.”

In terms of investments, the provisional data with exchanges showed that the foreign institutional investors (FIIs) bought stocks worth Rs 420.22 crore, while the domestic institutional investors (DIIs) divested scrip worth Rs 372.40 crore.

Sector-wise, the S&P BSE banking index plunged by 370.15 points, followed by the capital goods index, which declined by 157.38 points, and the automobile index fell by 145.35 points.

On the other hand, the S&P BSE FMCG index rose by 13.46 points, followed by the oil and gas index, which edged up by 6.51 points, and the basic materials index inched up by 2.71 points.

Major Sensex gainers during Thursday’s trade were: Coal India, up 1.21 per cent at Rs 333.25; Adani Ports, up 1.13 per cent at Rs 223.30; Asian Paints, up 1.06 per cent at Rs 1,040.25; Bharti Airtel, up 0.84 per cent at Rs 366.90; and Wipro, up 0.72 per cent at Rs 542.50.

Major Sensex losers were: Axis Bank, down 3.62 per cent at Rs 538.25; Power Grid, down 3.13 per cent at Rs 162.75; State Bank of India (SBI), down 2.30 per cent at Rs 225.60; Dr.Reddy’s Lab, down 2.15 per cent at Rs 3,600.10; and ICICI Bank, down 2.13 per cent at Rs 261.90.


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