Profit booking dents equity markets

Mumbai, May 31 (IANS) Profit booking, coupled with caution ahead of key macro-economic data, depressed the Indian equity markets on Tuesday.

The key indices traded flat — marginally in the red during the late-afternoon session, as selling pressure was witnessed in healthcare, IT (information technology) and consumer durables stocks.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) slipped by 8.90 points or 0.11 per cent, at 8,169.60 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 26,817.75 points, traded at 26,665.43 points (at 3.00 p.m.) — down 60.17 points or 0.23 per cent from the previous close at 26,725.60 points.

The Sensex has so far touched a high of 26,837.20 points and a low of 26,561.58 points during the intra-day trade.

The BSE market breadth was skewed in favour of the bears – with 1,585 declines and 914 advances.

The key indices on Monday had closed at their highest levels since October 2015. The equity markets had risen for the fifth consecutive session led by short covering, along with expectations of healthy quarterly results and higher crude oil prices.

The barometer index had edged up by 72 points or 0.27 per cent, while the NSE Nifty had gained by 21.85 points or 0.27 per cent.

Initially on Tuesday, the key indices opened on a higher note, in-sync with their Asian peers.

The equity markets soon ceded their initial gains on the back of profit booking after five consecutive sessions of rise.

Besides, investors were seen reluctant to chase prices ahead of the release of key macro-economic data points.

Major macro-economic data like the fourth quarter GDP (gross domestic product), fiscal deficit and eight core industries (ECI) are expected to be released later on Tuesday.

These key data points can give further cues towards a rate decision by the Reserve Bank of India (RBI) in its monetary policy meet scheduled on June 7.

However, short covering and lower level buying aided the key indices to pare some of their losses.

“Nifty is currently recovering from the day’s low supported by buying sentiments and correction in USD/INR prices. Banking stocks are witnessing recovery from day’s low, while IT stocks are trading sideways to bearish,” Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told IANS.

“Pharma sector stocks are trading with mix sentiments and struggling to recover from day’s low. Nifty is likely to hold gains before the market ends.”

According to Anand James, chief market strategist at Geojit BNP Paribas Financial Services, the markets were able to pare some of their losses on the back of short covering.

“Short covering aided markets to recover from the day’s lows. It was triggered in anticipation of healthy Q4 GDP figures,” James told IANS.

–IANS

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