Mumbai, Oct 21 (IANS) Receding Chinese markets, diminishing hopes of a European stimulus package and heightened chances of a US rate hike subdued Indian equities markets on Wednesday.
The negative global cues coupled with caution over the ongoing results season spooked investors, leading to a barometer index of the Indian equities markets closing 19 points down at the end of the day’s trade.
Initially, both the bellwether indices of Indian markets opened higher on the back of better-than-expected quarterly results which were released on Tuesday.
However, both indices ceded their initial gains, as investors were seen reluctant to chase higher prices.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) closed flat during the day’s trade. It closed lower by 9.95 points or 0.12 percent at 8,251.70 points.
The barometer 30-scrip sensitive index (S&P Sensex) of the Bombay Stock Exchange (BSE), which opened at 27,312.35 points, closed at 27,287.66 points — 19.17 points or 0.07 percent lower from its previous close at 27,306.83 points.
The Sensex touched a high of 27,445.24 points and a low of 27,190.55 points during the intra-day trade.
The barometer index closed 58.09 points or 0.21 percent lower on Tuesday, the previous trading session.
The Indian rupee too lost strength in the day’s trade. It was down seven paisa at 65.13 to a US dollar from its previous close of 65.06 to a greenback.
Both the domestic institutional investors (DIIs) and the foreign institutional investors (FIIs) were net sellers in the day’s trade.
According to data with stock exchanges, the DIIs sold stocks worth Rs.138.73 crore and the FIIs off-loaded scrip worth Rs.48.33 crore on Wednesday.
Analysts pointed out that investors’ confidence was eroded as caution built up over the possibility of a US rate hike this month, diminishing hopes of European Central Bank (ECB) extending its stimulus package and receding Chinese markets.
“The markets were impacted by the global cues eminating from heightened chances of a US rate hike, diminishing hopes of ECB extending its stimulus package and receding Chinese markets,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
On Tuesday, the US housing data revealed a rise of 6.5 percent in ground breaking activity which stood at 1.21 million units in September from 1.13 million units in August.
The data which showed a pickup in economic activity spooked investors as it can push the US Fed to raise interest rates in October.
The US Fed will decide whether to raise rates during its Federal Open Market Committee (FOMC) meet on October 27-28.
The FOMC assumes significance as higher interest rates in the US are expected to lead away FPIs (Foreign Portfolio Investors) from emerging markets such as India.
The ECB will conduct its monetary policy meeting on Thursday.
In Asia, the Chinese equities retreated from an eight-week high to end the day with losses of over three percent.
China’s Shanghai Composite index declined by 3.47 percent.
Vaibhav Agrawal, vice president, research, Angel Broking, told IANS: “Markets continued to trade flat in the absence of any short-term triggers and no major earnings surprise.”
“We expect markets to continue to trade flat tracking global cues. Some weakness can be expected ahead of the F&O (Futures and Options) expiry next week.”
Nitasha Shankar, vice president, research, with YES Securities, told IANS: “Small cap and midcap indices witnessed minor profit booking along with the headline index.”
“Metal and auto stocks saw fresh buying while banking stocks continued to trend lower.”
Sector-wise, S&P BSE capital goods index plunged by 166.22 points, banking index receded by 156.18 points, healthcare index plummet by 142.16 points, oil and gas index fell by 50.56 points and reality index shed 25.99 points.
The S&P BSE metal index surged by 87.17 points, automobile index augmented by 50.15 points and information technology (IT) index gained by 47.80 points.
Major Sensex gainers during Wednesday’s trade were: Vedanta, up 3.75 percent at Rs.105.05; Bajaj Auto, up 3.28 percent at Rs.2,518.25; Bharti Airtel, up 2.70 percent at Rs.371.45; Tata Steel, up 1.66 percent at Rs.244.80; and NTPC, up 1.64 percent at Rs.129.90.
The major Sensex losers were: Dr.Reddy’s Lab, down 3.30 percent at Rs.4,172.95; GAIL, down 2.10 percent at Rs.319.25; State Bank of India (SBI), down 1.87 percent at Rs.249.70; BHEL, down 1.77 percent at Rs.208.25; and Larsen and Toubro (L&T), down 1.44 percent at Rs.1,550.35.