Negative global cues, profit booking dent equity markets

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Mumbai, May 18 (IANS) Negative global cues, coupled with profit booking and poor quarterly results, pushed the Indian equity markets down on Wednesday.

This led the key indices to trade in the red during the late-afternoon trade session, as heavy selling pressure was witnessed in automobile and information technology (IT) stocks.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged lower by 39.20 points or 0.50 percent, at 7,851.55 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 25,671.48 points, traded at 25,679.38 points (at 3.00 p.m.) — down 94.23 points or 0.37 percent from the previous close at 25,773.61 points.

The Sensex has so far touched a high of 25,697.58 points and a low of 25,503.40 points during the intra-day trade.

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The BSE market breadth favoured the bears with 1,355 declines and 1,143 advances.

Both the key indices ended on a higher note during the previous trade session on Tuesday, as positive global indices, along with higher crude oil prices and expectations of better quarterly results lifted prices.

The barometer index on Tuesday gained 120.38 points or 0.47 percent, while the NSE Nifty had risen by 30 points or 0.38 percent.

Initially, the key indices opened on a negative note on Wednesday, in sync with their Asian peers and due to profit booking after two consecutive days of rise.

The Asian and domestic markets receded on the back of renewed fears of a US rate hike.

Besides, investors were seen cautious ahead of the US Federal Open Market Committee (FOMC) releasing minutes of its last meeting.

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

In addition, reduced chances of the Reserve Bank of India (RBI) to further ease its key lending rates during the upcoming monetary policy review subdued investors’ sentiments.

Moreover, poor quarterly results from Punjab National Bank dragged the equity markets lower.

“Markets are trading at a negative note led by weak Asian indices,” Vaibhav Agarwal, vice president and research head at Angel Broking, told IANS.

“Investors in emerging markets, including India are worried that higher interest rates in the US will drain liquidity from emerging markets and redirect it to developed economies, therefore markets might see volatility in the coming days.”

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