Parliament logjam subdues markets; Sensex down 56 points

Mumbai, July 23 (IANS) The logjam in parliament and anxiety surrounding a rate hike in the US subdued the Indian equity markets on Thursday, with a barometer index falling 56 points during the late-afternoon session.

The 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE) was trading 56.07 points or 0.20 percent down during the session.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) was however trading flat at 17.45 points or 0.20 percent down at 8,616.05 points.

The S&P BSE Sensex which opened at 28,540.97 points, was trading at 28,448.86 points (2.50 p.m.), down 56.07 points or 0.20 percent from the previous day’s close at 28,504.93 points.

The Sensex so far touched a high of 28,578.33 points and a low of 28,315.37 points in the intra-day trade.

Analysts said that the markets were subdued on account of the logjam in the parliament, which is delaying the passage of bills relating to the goods and services tax (GST) and land acquisition.

“Yesterday’s positive signs that there is a consensus building up to pass the GST in Rajya Sabha was dashed today because of continuous logjam. The same disruptions also delayed any movement on the land bill,” Anand James, co-head, technical research, Geojit BNP Paribas, told IANS.

“The political deadlock and protests in parliament are causing anxiety over the governments ability to conduct any business during the monsoon session (that runs till mid-August),” he added.

James pointed-out that the markets had factored-in a rise in US home sales, which grew by 3.2 percent in June to 5.49 million.

Key economic data revealed a recovery in the US economy just before the FOMC (Federal Open Market Committee) meet on July 29, which will give further clues as to when the rate hike might take place there.

With higher interest rates in the US, the FPIs (Foreign Portfolio Investors) are expected to be led away from emerging markets such as India.

The FOMC meet is followed by the future and options (F&O) expiry in the Indian equity markets on July 30. The Indian monetary policy review by the Reserve Bank of India (RBI) is scheduled for August 4 and all these upcoming events are making the markets volatile.

The markets also expect a rate cut by the RBI during its monetary policy review, as it may be the last time in this calendar year to cut lending rates before inflation spirals up again and the US Fed decides on its own rates in September.

Sector-wise, healthy buying was observed in consumer durables, automobile and oil and gas stocks. However, healthcare, banks and capital goods scrips came under intense selling pressure.

The S&P BSE consumer durables augmented by 223.53 points, the automobile index gained by 120.74 points and the oil and gas index rose by 72.84 points.

The BSE S&P healthcare index declined by 119.34 points, the bank index receded by 103.58 points and capital goods index was lower by 82.12 points.

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