Disappointing macro-data, profit booking dent markets (Roundup)

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Mumbai, May 13 (IANS) Disappointing macro-economic data, along with profit booking, dragged the Indian equity markets lower on Friday.

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

The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged down 85.50 points or 1.08 percent, at 7,814.90 points.

The barometer 30-scrip BSE sensitive index (Sensex), which opened at 25,739.94 points, closed the day’s trade at 25,489.57 points — down 300.65 points or 1.17 percent from the previous close at 25,790.22 points.

The Sensex touched a high of 25,743.69 points and a low of 25,400.27 points during the intra-day trade.

The BSE market breadth was heavily tilted in favour of the bears — with 1,523 declines and 1,033 advances.

Both the key indices had ended with substantial gains during the previous trade session on Thursday, as positive domestic cues, including parliamentary approval for a key economic legislation lifted prices.

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The barometer index had gained 193.20 points or 0.75 percent, while the NSE Nifty had edged up by 51.55 points or 0.66 percent.

Initially, the equity markets opened on a flat-to-negative note on Friday, a day after key macro-economic data showed a rise in retail inflation, even as mixed signals emerged from Asian indices.

Investors were disappointed after the Consumer Price Index (CPI) showed a rise in April. The annual retail inflation for last month rose to 5.39 percent from 4.83 percent in March.

The rise in the CPI has reduced the chances of the Reserve Bank of India (RBI) to further ease its key lending rates during the monetary policy review scheduled in June.

Apart from the CPI, investors’ sentiments were subdued by a flat growth in the country’s factory output for March. The Index of Industrial Production (IIP) for March rose negligibly by 0.1 percent from a rise of two percent in February.

Besides, profit booking was triggered after the equity markets reached their pre-Wednesday levels, which dragged the key indices lower.

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In addition, a slide in crude oil prices dampened sentiments.

However, equity markets pared some of their losses on the back of value buying, even as investors optimistically awaited for IMD’s (India Meteorological Department) next monsoon forecast on May 15.

“Profit booking after the markets reached their pre-Wednesday levels dragged the key indices lower,” Anand James, chief market strategist, Geojit BNP Paribas Financial Services, told IANS.

“The profit booking momentum was strengthened after yesterday’s disappointing macro-economic data.”

According to Vaibhav Agarwal, vice president and research head at Angel Broking, equity markets ended on a negative note led by weak Asian markets.

“The trigger for the losses was data showing acceleration in consumer price inflation in April 2016, which triggered speculation that the RBI would hold off on cutting rates at its policy review next month,” Agarwal said.

Both the foreign institutional investors (FIIs) and domestic institutional investors (DIIs) turned into net buyers during the day’s trade

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Data with stock exchanges showed that the FIIs bought stocks worth Rs.1,493.88 crore, while the DIIs purchased scrip worth Rs.667.03 crore.

Sector-wise, all the 19 sub-indices of the BSE came under intense selling pressure during the day’s trade, led by banking, capital goods and automobile stocks.

The S&P BSE banking index plummetted by 241.43 points, followed by the capital goods index, which plunged by 213.73 points; and the automobile index declined by 176.21 points.

Major Sensex gainers during Friday’s trade were Asian Paints, up 1.70 percent at Rs.942.50; Tata Motors, up 0.72 percent at Rs.390; and ITC, up 0.09 percent at Rs.319.30.

Major Sensex losers were Adani Ports, down 3.48 percent at Rs.188.40; Hindustan Unilever (HUL), down 2.58 percent at Rs.831.10; BHEL, down 2.50 percent at Rs.122.70; HDFC, down 2.45 percent at Rs.1,166.05; and Tata Steel, down 2.36 percent at Rs.323.



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