Equity markets plunge on negative global cues (Roundup)

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Mumbai, April 5 (IANS) The Indian equity markets on Tuesday plunged on negative global cues, along with profit booking and weak crude oil prices.

In the process, both the key indices of the Indian equity markets plummeted at the end of the day’s trade.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 25,372.44 points, ended at 24,883.59 points — down 516.06 points or 2.03 percent from the previous close at 25,399.65 points.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) receded by 156 points or 2.01 percent, to 7,603.20 points.

The Sensex touched a high of 25,372.44 points and a low of 24,837.51 points during the intra-day trade.

The BSE market breadth was heavily tilted in favour of bears — with 1,630 declines and 884 advances.

In contrast, the barometer index had closed in the positive territory on Monday. It had ended Monday’s trade with a gain of 130.01 points or 0.51 percent, while the Nifty inched up 46 points or 0.59 percent.

Initially, on Tuesday, both the key indices of the Indian equity markets opened on a negative note in-sync with most of their Asian peers. The lower close of the US markets on Monday, too, dipped the Indian indices.

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The weakness in the equity markets continued, as investors discounted the 25 basis points cut in key lending rates by the Reserve Bank of India (RBI).

The rate cut was announced during RBI’s first bi-monthly monetary policy review for 2016-17.

Market analysts stated that investors expected a larger rate cut, as they had already factored in a 25 basis points reduction in key lending rates.

Besides, the FOMC (Federal Open Market Committee) minutes expected to be released on Wednesday and the start of the fourth quarter (Q4) results season deterred investors from chasing prices.

The FOMC minutes assume significance — as they can give vital cues to a likely US rate hike. A hike in the US interest rates is expected to lead away Foreign Portfolio Investors (FPIs) from emerging markets such as India.

In addition, weak crude oil prices due to supply side issues dented sentiments.

Even, the Indian rupee declined heavily. It weakened by 26 paise at 66.46 to a US dollar from its previous close at 66.20 to a greenback.

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“Despite a rate cut by the RBI, global cues weighed heavy on the Indian markets. Profit booking, negative global indices, except for those in China and weak crude oil prices dented sentiments,” Anand James, chief market strategist, Geojit BNP Paribas Financial Services, told IANS.

According to James, the lack of volumes in the day’s trade could be attributed to the cloud that has fallen on high frequency trading after SEBI’s technical advisory committee recommended action on the basis of media reports of unfair access to market data.

Vaibhav Agarwal, vice president and research head at Angel Broking said: “Volatility in oil prices continued to weigh on the markets worldwide. As a result, European markets traded sharply lower, which further pushed the Indian markets down in the day’s trade.”

Nitasha Shankar, senior vice president for research with YES Securities informed that broader markets turned lower in line with the headline indices, as midcap and smallcap indices ended lower by two percent each.

“All sectorial indices ended deep in the red. PSU bank index was the major drag ending down with cut of five percent,” Shankar noted.

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Furthermore, foreign institutional investors (FIIs) were net sellers during the day’s trade, while the domestic institutional investors (DIIs) bought stocks.

The data with stock exchanges showed that FIIs sold stocks worth Rs.800.79 crore, while the DIIs bought stocks worth Rs.55.85 crore.

Sector-wise, stocks of banking, automobile and capital goods came under heavy selling pressure, whereas healthy buying was witnessed in the scrip of consumer durables.

The S&P BSE banking index plunged by 591.65 points, followed by the automobile index, which plummeted by 510.44 points; and the capital goods index receded by 344.50 points.

However, the S&P BSE consumer durables index rose by 30.14 points.

During the day’s trade, only one out of the 30-scrip which comprises the Sensex remained afloat. The sole Sensex gainer during Tuesday’s trade was Lupin, up 0.12 percent at Rs.1,463.05.

Major Sensex losers during the day’s trade were Adani Ports, down 6.23 percent at Rs.227.35; ICICI Bank, down 5.45 percent at Rs.225.50; State Bank of India (SBI), down 5.38 percent at Rs.184.50; Bharti Airtel, down 5.03 percent at Rs.330.35; and Tata Motors, down 4.52 percent at Rs.370.50.

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