Mumbai, Feb 23 (IANS) Caution-selling, combined with profit-booking and negative global indices, dragged the Indian equity markets lower during the mid-afternoon trade session on Tuesday.
Consequently, the barometer 30-scrip sensitive index (Sensex) of the BSE receded by 317 points, or 1.33 percent.
Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) traded in the red. It edged down by 107.05 points, or 1.48 percent, at 7,127.50 points.
The Sensex, which opened at 23,850.41 points, traded at 23,471.59 points (at 2.30 p.m.) — down 317.20 points, or 1.33 percent from the previous day’s close at 23,788.79 points.
So far during the intra-day trade, the Sensex touched a high of 23,851.51 points and a low of 23,392.40 points.
The BSE market breadth was heavily tilted towards the bears — with 1,823 declines and 639 advances.
Initially, the barometer of the Indian equity markets opened on a positive note, following the recent uptrend and Monday’s positive close at the US indices.
However, caution-selling at the start of the budget session dragged the equity markets lower.
Further, profit-booking on the gains made in the past few sessions and a weak rupee dented investors’ sentiments.
Investors’ confidence was eroded by the continuing conflict between the ruling NDA (National Democratic Alliance) and the opposition, which is seen as having a bearing on some key economic legislations that await parliamentary approval.
The government is expected to push through major economic legislations like bankruptcy code and Goods and Services Tax (GST) Bill during the ongoing Budget session.
In addition, a weak rupee kept investors’ unnerved. The rupee opened at 68.66 to a US dollar from its previous close of 68.60-61 to a greenback.
On Monday, the rupee weakened by 14 paise to touch its 30-month closing low. This level was last seen during late August, 2013.
Besides, softening of crude oil prices which declined by 1.95 percent to $32.7 and negative Asian and European markets, deterred investors to chase stock prices higher.
Caution also prevailed over the upcoming G20 finance ministers’ meet in Shanghai, China.
“Caution over the budget session amidst political tensions and softening of crude oil prices set in a negative bias,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
“Investors were seen reluctant to chase prices due to the budget session and F&O (future and option) expiry.”
Vaibhav Agarwal, vice president and research head at Angel Broking, elaborated that markets witnessed profit booking after four consecutive sessions of gains on the back of weak Asian cues.
“With Europe opening in the negative, we have seen no respite from the broad based selling with an advance decline ratio of 1:3 on the BSE,” Agarwal noted.
“Markets are trading in a narrow band over the last few sessions and we expect markets to consolidate before making their next move. We expect volatility to increase towards the end of this week in anticipation of the budget.”