Indian equity markets drop on global cues, profit booking (Roundup)

Mumbai, July 18 (IANS) Mixed global cues, gloomy quarterly results and profit booking subdued the Indian equity markets on Monday.

The key indices closed the day’s trade in the red, after a decent run during the previous week procuring gains of over 2.5 per cent each.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 27,920.66 points, closed the day’s trade at 27,746.66 points — down 89.84 points or 0.32 per cent from the previous close at 27,836.50 points. It touched a high of 28,013.50 points and a low of 27,697.69 points during the intra-day trade.

The market breadth was tilted in favour of the bears — with 1,644 declines and 1,095 advances. Heavy selling pressure was witnessed in telecom, oil and gas and realty stocks.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged down to a five-day low to 8,508.70 points — down 32.70 points or 0.38 per cent.

On Friday, the benchmark indices closed lower, subdued by profit booking, a weak rupee and lower crude oil prices. The barometer index was down 105.61 points or 0.38 per cent, while the Nifty edged down by 23.60 points or 0.28 per cent.

Initially, the benchmark indices opened higher following firm global cues and expectations of the Goods and Services Tax (GST) bill passing in the monsoon session of parliament that began on Monday.

Although the Asian markets traded higher, the Indian markets took cues from the European markets which showed volatility around the afternoon trade session.

The markets, which showed a positive momentum earlier during the day mainly due to healthy expectations out of quarterly results, were later disappointed on average results from the fast moving consumer goods (FMCG) major Hindustan Unilever.

Some movement was noticed in the state-owned banks, specially State Bank of India’s subsidiary banks. Expectations of the government’s announcement of the next round of capital infusion in state-run banks, for which Rs 25,000 crore has been earmarked for this fiscal, boosted investors’ sentiments.

However, these sentiments were later eroded on the government decision that oil producers would have to pay royalty to crude oil producing states at pre-discount rates, which led the state-run explorer Oil and Natural Gas Corp (ONGC) stocks to plunge nearly five per cent.

“Positivity or expectations regarding GST guided the markets, but the major cue was the earnings season. So, GST remained in the background but earnings remained the dominant thing today (Monday),” Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.

“Though expectations of GST passage gave stocks a positive start to the week, sector specific themes — be it royalty for energy stocks or tariff cuts for telecom stocks — kept chipping away recent gains,” James said.

“With European markets turning lower on reduced chances of stimulus measures, sentiments turned decidedly bearish, dragging Nifty to its lowest close in five days.”

According to Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services, the day, which started on a positive note, ended in the negative with every eye on the parliament session where the GST bill is likely to be discussed on Tuesday.

“Additionally, the start of Q1FY17 (first quarter of fiscal year 2016-17) result has been subdued, which is creating extra volatility in the market,” he added.

In terms of investments, provisional data with thr exchanges showed that foreign institutional investors (FIIs) bought stocks worth Rs 599.09 crore, while the domestic institutional investors (DIIs) divested scrips worth Rs 439.09 crore.

Sector-wise, the S&P BSE telecom index declined by 3.23 per cent, followed by the oil and gas index, which fell by 1.61 per cent, and the realty index slipped by 1.32 per cent.

On the other hand, the S&P BSE automobile index rose by 0.35 per cent and the IT index was up 0.30 per cent.

Major Sensex gainers during Monday’s trade were: Bajaj Auto, up 2.51 per cent at Rs 2,755.80; Axis Bank, up 0.94 per cent at Rs 570.05; Infosys, up 0.88 per cent at Rs 1,081.70; Sun Pharmaceuticals, up 0.81 per cent at Rs 776.65; and Coal India, up 0.59 per cent at Rs 321.55.

Major Sensex losers were: ONGC, down 4.97 per cent at Rs 219; Bharti Airtel, down 3.98 per cent at Rs 363.45; Hindustan Unilever, down 2.04 per cent at Rs 920.45; Tata Steel, down 1.94 per cent at Rs 365.60; and Cipla, down 1.56 per cent at Rs 508.10.



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