Mumbai, Jan 21 (IANS) Bearish global indices, coupled with a weak rupee and long-liquidation positions pushed down the Indian equity markets during the late-afternoon trade session on Thursday.
This led a barometer index of the Indian equity markets to trade flat.
The selling pressure led both the bellwether indices of the Indian equity markets to trade at levels which were last seen during May-June 2014.
Initially, both the bellwether indices opened on a positive note due to Wednesday’s late trading hour short-covering rally and slightly higher crude oil prices.
However, the bellwether indices soon ceded their gains in sync with their bearish Asian peers.
Furthermore, investors were seen to be cautious regarding the slide in the rupee value, which weakened to 68 rupees to a US dollar during the intra-day trade.
The weakness in the rupee value indicates the massive foreign funds outflow from the Indian equity and debt markets.
On Wednesday, the foreign institutional investors (FIIs) were net sellers.
According to data with stock exchanges, FIIs divested Rs.1,324.69 crore on Wednesday.
Besides, caution prevailed over the upcoming US macro-data points of jobless claims and crude oil inventory figures.
Nevertheless, markets were able to pare some of their losses on the back of value buying. The positive sentiments were supported after European markets opened in the green.
This led the barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) to marginally recede by 28 points or 0.12 percent.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) was trading flat. It was down by 12.55 points or 0.17 percent at 7,296.75 points.
The S&P BSE Sensex, which opened at 24,194.75 points, was trading at 24,033.64 points (2.45 p.m.) — down 28.40 points or 0.12 percent from the previous day’s close at 24,062.04 points.
The Sensex touched a high of 24,351.83 points and a low of 23,862 points, during the intra-day trade.
The S&P BSE market breadth favoured the bulls — with 1,344 advances and 1,188 declines.
“Our markets opened on a positive note on the back of yesterday’s short-covering rally and sharp close. Even the slightly higher crude oil prices helped sentiments at the fag end of a fortnight-long selling period,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
“However, bearish Asian markets, weak rupee and long-liquidated positions dampened sentiments.”
Vaibhav Agarwal, vice president and research head at Angel Broking, cited that markets continue to trade on a weak note despite seeing some intra-day strength after European markets opened in the green.
“While valuations have turned attractive, FIIs continue to remain net sellers which would limit any gains in the market,” Agarwal noted.
“With earnings continuing to remain lacklustre, we expect markets to consolidate at lower levels before we see any uptick. We expect to see some positive bias ahead of the budget, which would be a key trigger for the markets.”
Nitasha Shankar, vice president for research with YES Securities, elaborated that broader markets are falling in line with the headline indices amidst sharp profit booking in high beta stocks.