Global concerns, slowing domestic growth dent markets (Roundup)

Mumbai, Feb 9 (IANS) Disappointing macro-economic data, coupled with a massive plunge in Japanese indices and a weak rupee subdued Indian equity markets on Tuesday.

This dragged a barometer index of the Indian equity markets in the red and resulted in the day’s trade closing 266 points down.

Initially, both the bellwether indices of the Indian equity markets opened on a negative note following Monday’s falls in the domestic markets and the US-based stocks.

Sentiments were subdued by a sharp plunge of over five percent in Japanese barometer index.

Japan’s 10-year government bond yield receded to negative terrain, as Yen climbed to more than a year’s high against the US dollar.

Further, investors were seen disappointed over the third quarter (Q3) earnings results of corporate India, as well as a fall in the country’s Q3 GDP (gross domestic product) numbers.

In addition, a weak rupee unnerved investors. It closed flat at 67.90 to a US dollar from its previous close of 67.94-95 to a greenback.

“Indian rupee had opened weaker on the back of carnage across Asian markets, followed by risk-off sentiments from the US markets overnight,” Anindya Banerjee, associate vice president for currency derivatives with Kotak Securities, told IANS.

“However, rupee closed stronger, thanks to aggressive intervention from RBI and hedging from exporters. Overall range remains between 67.50-68.30.”

Even weak crude oil prices return below $30 a barrel (one barrel is equal to 159 litres), as well as German IIP’s (index of industrial production) fall dented sentiments.

Furthermore, absence of any positive triggers and investors’ doubts over the government’s ability to perk up investments dragged markets’ lower.

Consequently, the barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) receded by 266 points or 1.10 percent.

Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) ended the day’s trade in the negative territory. It was lower by 89.05 points, or 1.21 percent, at 7,298.20 points.

The S&P BSE Sensex, which opened at 24,076.85 points, closed at 24,020.98 points — down 266.44 points or 1.10 percent from the previous day’s close at 24,287.42 points.

It touched a high of 24,111.19 points and a low of 23,919.47 points during the intra-day trade.

The S&P BSE market breadth favoured the bears — with 1,831 declines and 779 advances.

“Absence of any positive trigger and concerns over global growth cascaded into the sharp plunge in Indian markets,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.

Vaibhav Agarwal, vice president and research head at Angel Broking, elaborated that markets corrected sharply on the back of continued weakness in global markets.

“US markets saw a sell off yesterday led by a fall in crude prices on the back of global growth concerns,” Agarwal explained.

Nitasha Shankar, vice president for research with YES Securities, said that volumes remained high as selling intensified during the day’s trade, suggesting choppy and weak sessions ahead. Broader markets ended weak in line with the headline indices.

“PSU banks resumed the downtrend following weak set of results. Pharma index was the lone gainer in trade today. Tech and PSU bank stocks were main culprits in the market fall,” Shankar noted.

All sector-based indices of the BSE except for oil and gas and utilities sectors ended in the red.

The S&P BSE IT index plunged by 373.55 points, automobile index plummet by 296.34 points, banking index receded by 210.27 points, metal index declined by 168.80 points and capital goods index edged-lower by 162.16 points.

Meanwhile, the S&P BSE oil and gas index gained 17.77 points and utilities index inched-up by 2.18 points.

Both the foreign institutional investors (FIIs) and the domestic institutional investors (DIIs) were net sellers during the day’s trade.

The data with stock exchanges showed that FIIs divested Rs.680.70 crore, while the DIIs’ sold stocks worth Rs.174.14 crore.

Major Sensex gainers during Tuesday’s trade were Lupin, up 4.68 percent at Rs.1,904; Sun Pharma, up 2.17 percent at Rs.854.25; NTPC, up 1.95 percent at Rs.125.60; ONGC, up 1.77 percent at Rs.218.40; and Gail, up 1.48 percent at Rs.348.60.

Major Sensex losers during the day’s trade were Coal India, down 4.38 percent at Rs.309.20; Tata Motors, down 4.12 percent at Rs.310.60; Tata Consultancy Services (TCS), down 3.68 percent at Rs.2,281.45; Dr.Reddy’s Lab, down 3.61 percent at Rs.2,959.65; and Infosys, down 3.46 percent at Rs.1,109.30.

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