Mumbai, Oct 10 (IANS) The Indian equity markets on Monday closed on a flat-to-positive note on the back of reduced chances of a US rate hike and a strengthened rupee.
However, gains were capped by profit booking, outflow of foreign funds, negative European markets and caution ahead of key quarterly earnings’ results.
The wider 51-scrip Nifty of the National Stock Exchange (NSE) inched up by 11.20 points or 0.13 per cent to 8,708.80 points.
The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 28,144.28 points, closed at 28,082.34 points — up only 21.20 points or 0.08 per cent from the previous close at 28,061.14 points.
The Sensex touched a high of 28,216.64 points and a low of 28,068.32 points during the intra-day trade.
The BSE market breadth was in favour of the bulls — with 1,700 advances and 1,182 declines.
On last Friday, both the key Indian indices were pulled lower by negative global indices, caution ahead of earnings’ announcements and profit booking.
The barometer index had closed lower by 45.07 points or 0.16 per cent to 28,061.14 points, while the NSE Nifty surged by 11.95 points or 0.14 per cent to 8,697.60 points.
Initially on Monday, the benchmark indices opened on a positive note in sync with their Asian peers.
Asian and domestic markets had surged due to reduced chances of US Federal Reserve (US Fed) going in for a rate hike in December, after lower than expected macro-data on US jobs’ growth in September was released on last Friday.
On October 7, the US Bureau of Labor Statistics reported that the total non-farm payroll employment increased by just 156,000 in September, whereas the unemployment rate remained little changed at 5 per cent.
The data assumes significance as it acts as a gauge for the likelihood of a rate hike by the US Fed in December.
The data was been deemed as lower than expected by analysts, however, some financial reports have suggested that September jobs’ growth figure can be viewed as strong enough for the US Fed to consider a rate hike by the end of the year.
A rate-hike can potentially lead FPIs (Foreign Portfolio Investors) away from emerging markets such as India, and is also expected to dent business margins as access to capital from the US will become expensive.
Besides, healthy buying by domestic institutional investors (DIIs) and an appreciation of the rupee supported the key indices’ upward movement.
The Indian rupee strengthened by 16 paise to 66.53 against a US dollar from its previous close of 66.69 to a greenback.
However, gains were capped due to caution ahead of key quarterly earnings’ results and the release of August factory output data — IIP (Index of Industrial Production).
The second quarter results season started on October 7. TCS (Tata Consultancy Services) is expected to be the first blue chip firm to come out with its results on October 13, followed a day later by Infosys during the truncated week.
“Weak US non-farm payrolls data, broadly higher Asian markets and a strengthened rupee lent positive bias to the equity markets,” Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.
“However, caution ahead of key macro-economic data on factory output and earnings’ results capped gains.”
According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, CNX Nifty traded with sideways to firm sentiments due to the lack of buying interest at higher levels.
“Banking, pharma and auto stocks traded with mixed sentiments due to profit booking at higher levels. However, textile and cement stocks traded firm on strong buying support from traders,” Desai said.
“Bearish USD/INR futures prices prevented any heavy selling pressure.”
In terms of investments, provisional data with exchanges showed that the foreign institutional investors (FIIs) sold stocks worth Rs 547.26 crore, whereas the DIIs bought scrip worth Rs 468.96 crore.
Sector-wise, the S&P BSE oil and gas index plunged 71.24 points, followed by the capital goods index, which declined by 29.80 points, and the energy index fell by 22.75 points.
In contrast, the S&P BSE consumer durables index surged by 216.08 points, the metal index rose by 151.98 points, and the IT index gained by 105.84 points.
Major Sensex gainers during Monday’s trade were: Tata Steel, up 2.71 per cent at Rs 417.40; Asian Paints, up 2.22 per cent at Rs 1,211.95; Cipla, up 1.90 per cent at Rs 580.55; Infosys, up 1.67 per cent at Rs 1,029.55; and Lupin, up 1.17 per cent at Rs 1,516.25.
Major Sensex losers were: NTPC, down 1.28 per cent at Rs 146.45; Bharti Airtel, down 1.27 per cent at Rs 316.10; Reliance Industries, down 1.26 per cent at Rs 1,095.95; Adani Ports, down 1.14 per cent at Rs 264; and HDFC, down 0.98 per cent at Rs 1,391.80.