Profit booking, key events plunge equity markets (Roundup)

Mumbai, July 26 (IANS) Profit booking, caution ahead of key global and domestic events and negative international indices plunged the Indian equity markets on Tuesday.

Despite value buying at lower levels and recovery in rupee’s strength, the key indices closed deep in the red.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) declined by 45 points or 0.52 per cent to 8,590.65 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 28,121.37 points, closed at 27,976.52 points — down by 118.82 points or 0.42 per cent from the previous close at 28,095.34 points.

The Sensex touched a high of 28,149.53 points and a low of 27,927.13 points during the intra-day trade.

The BSE market breadth was tilted in favour of the bears — with 1,687 declines and 1,012 advances.

Both the key Indian indices had ended on a higher note during the previous trade session on Monday due to short covering, expectations of key reforms and healthy inflow of foreign funds.

On Monday, the equity markets also touched their new closing highs in almost a year.

On a closing basis, the NSE Nifty had touched a new 52-week high, whereas the BSE Sensex reached its highest closing levels in 11 months.

The barometer index had gained by 292.10 points or 1.05 per cent to 28,095.34 points, while the NSE Nifty edged up by 94.45 points or 1.11 per cent to 8,635.65 points.

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

However, profit booking, negative Japanese indices and lower crude oil prices dented sentiments.

Besides, investors were seen cautious ahead of Finance Minister Arun Jaitley’s meet with his counterparts from the states to discuss the proposed amendments to the GST (Goods and Services Tax) Bill.

The pan-India tax reform has been passed by the Lok Sabha but is stuck in the Rajya Sabha, where the government lacks a majority.

It is widely expected that the bill will be listed for discussion in the Rajya Sabha following Jaitley’s consultations with the Empowered Committee of State Finance Ministers.

Nevertheless, a logjam in parliament has spooked investors over the prospects of the bill getting passed.

In addition, volatility was flared by the start of the US Fed’s FOMC (Federal Open Market Committee) meet.

The meet assumes significance as it will decide whether or not to increase interest rates. A hike in the US interest rates can potentially lead FPIs (Foreign Portfolio Investors) away from emerging markets such as India.

On the other hand, healthy quarterly earnings, above average monsoon rain falls and value buying and recovery in rupee’s strength arrested the steep fall.

The Indian rupee strengthened in the day’s trade. It appreciated by seven paise to 67.27-28 against a US dollar from its previous close of 67.35 to a greenback.

“Profit booking after healthy gains in the last few sessions dragged the equity markets lower,” Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.

“There were also concerns over the passage of the GST bill and the ongoing FOMC meet.”

According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, heavy selling was witnessed in the second half of the day’s trade session.

“Most sector stocks like auto, banking and pharma faced profit booking at higher levels. However, IT sector stocks traded with sideways to firm sentiments,” Desai noted.

In terms of investments, the provisional data with exchanges showed that the FIIs bought stocks worth Rs 670.89 crore, while the domestic institutional investors (DIIs) divested scrip worth Rs 418.29 crore.

Sector-wise, heavy selling was witnessed in automobile, healthcare and banking stocks, whereas information technology (IT) and technology, entertainment and media (TECK) scrip rose.

The S&P BSE automobile index receded by 232.60 points, followed by healthcare index which declined by 181.71 points and banking index edged lower by 159.23 points.

In contrast, the IT index was higher by 40.59 points and the TECK index inched up by 15.37 points.

Major Sensex gainers during Tuesday’s trade were: Axis Bank, up 2.85 per cent at Rs 553.65; Power Grid, up 1.63 per cent at Rs 171.40; Tata Steel, up 1.06 per cent at Rs 367.65; Wipro, up 0.82 per cent at Rs 546.85; and Infosys, up 0.77 per cent at Rs 1,088.80.

Major Sensex losers were: Dr. Reddy’s Lab, down 4.37 per cent at Rs 3,322.85; ICICI Bank, down 2.64 per cent at Rs 262.05; Hero MotoCorp, down 2.12 per cent at Rs 3,210.30; State Bank of India (SBI), down 1.46 per cent at Rs 226.50; and Maruti Suzuki, down 1.44 per cent at Rs 4,485.25.

–IANS

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