Profit booking drags equity markets lower (Roundup)

Mumbai, June 21 (IANS) Profit booking, combined with uncertain global cues and a weak rupee, subdued the Indian equity markets on Tuesday.

Consequently, the key indices closed the day’s trade marginally in the red as heavy selling pressure was witnessed in banks, capital goods and healthcare stocks.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged lower by 18.60 points, or 0.23 per cent, at 8,219.90 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 26,907.42 points, closed at 26,812.78 points — down 54.14 points or 0.20 per cent from the previous close at 26,866.92 points.

The Sensex touched a high of 26,925.64 points and a low of 26,754.60 points during the intra-day trade.

The BSE market breadth was slightly tilted in favour of the bears — with 1,304 declines and 1,296 advances.

Both the key Indian indices ended in the green on Monday, following economic reforms and higher global equity markets. The barometer index had surged by 241.01 points or 0.91 per cent, while the NSE Nifty had risen by 68.30 points or 0.84 per cent.

Initially on Tuesday, the equity markets opened on a flat-to-positive note, in sync with their Asian peers.

The Asian markets gained on the back of increased chances of Britain staying on in the EU. The island nation will go in for a referendum on this issue on THursday.

Some follow-up buying was seen in the initial trade on the back of Monday’s announcements of major reforms in foreign equity norms, notably in aviation, pharmaceuticals and food processing sectors.

However, profit booking and negative European markets around the mid-afternoon period local India time dragged the key domestic indices lower.

Investors were also seen concerned about US Federal Reserve Chairperson Janet Yellen’s testimony to the US Congress. The testimony can provide further cues towards the next phase of the key lending rate hikes.

A hike in the US interest rates can potentially lead FPIs (Foreign Portfolio Investors) away from emerging markets such as India.

Besides, European Central Bank (ECB) President Mario Draghi will address the European Parliament in Brussels, Belgium.

In addition, lower global crude oil prices and a weak rupee eroded investors’ risk-taking appetite.

The Indian rupee weakened by 17 paise during the day’s trade. It closed at 67.49 against a US dollar from its previous close of 67.31-32 to a greenback.

“Profit booking and some consolidation was witnessed. Lower crude oil prices and a weak rupee too dented domestic indices,” Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.

“Investors were cautious ahead of Yellen’s testimony. However, possible announcements on a new textile policy kept hopes for more reforms alive.”

Dhruv Desai, Director and Chief Operating Officer of Tradebulls, said that Nifty opened lower on the back of firm dollar/rupee exchange rate.

“It failed to recover in second half of the trading session mainly due to firm sentiments of USD/INR,” Desai said.

In terms of investments, the foreign institutional investors (FIIs) purchased stocks worth Rs 484.66 crore, whereas domestic institutional investors (DIIs) divested scrip worth Rs 335.53 crore.

Sector-wise, S&P BSE automobile index surged by 131.51 points, followed by the consumer durables index, which gained by 45.30 points; and the capital goods index rose by 32.63 points.

On the other hand, the S&P BSE banking index plunged by 131.51 points, followed by the healthcare index, which declined by 59.46 points, and the capital goods index fell by 58.08 points.

Major Sensex gainers during Tuesday’s trade were ONGC, up 1.68 per cent at Rs 217.40; Mahindra and Mahindra (M&M), up 0.92 per cent at Rs 1,363.20; Tata Motors, up 0.70 per cent at Rs 485; Wipro, up 0.59 per cent at Rs 560.25; and HDFC, up 0.38 per cent at Rs 1,232.25.

Major Sensex losers during the day’s trade were Adani Ports, down 1.72 per cent at Rs 203.20; NTPC, down 1.43 per cent at Rs 151.80; Axis Bank, down 1.37 per cent at Rs 517.45; Asian Paints, down 1.18 per cent at Rs 980.20; and State Bank of India (SBI), down 0.88 per cent at Rs 213.90.



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