Mumbai, May 19 (IANS) Negative global cues, coupled with lower crude oil prices and a weak rupee, dragged the Indian equity markets lower on Thursday.
This led the key indices to trade in the red during the mid-afternoon session, as heavy selling pressure was witnessed in the banking, capital goods and fast moving consumer goods (FMCG) stocks.
The wider 51-scrip Nifty of the National Stock Exchange (NSE) declined by 66 points or 0.84 percent, at 7,804.15 points.
The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 25,713.84 points, traded at 25,466.07 points (at 2.30 p.m.), down 238.54 points or 0.93 percent from the previous day’s close at 25,704.61 points.
The Sensex has touched a high of 25,714.56 points and a low of 25,451.80 points in the trade so far.
The BSE market breadth favoured the bears with 1,381 declines and 1,033 advances.
Both the key indices ended on a lower note during the previous trade session on Wednesday due to negative global cues, profit booking and poor quarterly results.
The barometer index on Wednesday had fallen by 69 points or 0.27 percent, while the NSE Nifty edged down by 20.60 points or 0.26 percent.
Initially, the key indices opened on Thursday on a flat note, in sync with their Asian peers.
The Asian and domestic markets receded on the back of hawkish comments from the US Federal Reserve, which increased the chances of a future rate hike. The US Federal Open Market Committee’s (FOMC) April minutes disclosed that the US central bank might raise key lending rates in June.
A hike is expected to lead FPIs (Foreign Portfolio Investors) away from emerging markets such as India.
Besides, lower crude oil prices and a weak rupee eroded investors’ confidence.
However, the equity markets were able to pare some of their losses on the back of value buying at lower levels.
In addition, investors’ sentiments turned slightly positive after the electoral victory of the Bharatiya Janata Party (BJP) in Assam, which could potentially strengthen the central government’s ability to push through economic reforms.
“Global markets reacted negatively after the Federal Reserve’s April meeting minutes which indicated that a June rate hike was likely, if the US economic data continues to improve,” Dhruv Desai, director and chief operating officer of Tradebulls, told IANS.
“The market got some positive boost after BJP declared victory in Assam.”
According to Nitasha Shankar, senior vice president for research with YES Securities, Indian markets extended their range-bound consolidation phase.