Mumbai, Sep 20 (IANS) Indian equity markets were dragged lower on Tuesday by profit-booking coupled with negative global cues and caution ahead of major global financial events.
Both the key indices traded in the red during the mid-afternoon trade session as heavy selling pressure was witnessed in automobile, IT and banking stocks.
The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged down 39.10 points, or 0.44 per cent, to 8,769.30 points.
The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 28,690.66 points, traded at 28,504.64 points (at 2.30 p.m.) — down 129.86 points or 0.45 per cent from the previous close at 28,634.50 points.
The Sensex has so far touched a high of 28,698.81 points and a low of 28,480.53 points during the intra-day trade.
The BSE market breadth was tilted in favour of the bears — with 1,558 declines and 1,061 advances.
On Monday, the benchmark indices had ended on a flat-to-positive note, as fresh foreign fund inflows, higher crude oil prices and value buying kept the sentiments buoyed.
The barometer index had risen by 35.47 points or 0.12 per cent, while the NSE Nifty edged up by 28.55 points or 0.33 per cent.
“The markets are primarily driven by key global events like the BoJ’s monetary policy review and the US FOMC meet today,” Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.
“However, the markets capped gains as investors were reluctant to chase prices higher.”
Initially on Tuesday, the benchmark indices opened on a flat-to-negative note following negative global cues.
Besides, investors were cautious ahead of the US Fed’s Federal Open Market Committee (FOMC) meet and the Bank of Japan (BoJ) monetary policy review announcements.
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.
Moreover, profit booking at higher levels led to the key indices capping gains.
According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, the CNX Nifty traded lower on profit-booking from traders.
“Most IT stocks traded down on profit-booking. Banking stocks are traded with mixed sentiments, while auto stocks traded down on profit-booking,” Desai said.
“Aviation stocks traded down… however, it is likely to recover in second half of the session tracking lower crude oil prices.”