Profit booking, parliament logjam dents equity markets

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Mumbai, April 28 (IANS) Profit booking, coupled with logjam in parliament and negative global cues, subdued the Indian equity markets on Thursday.

The sell-off was accelerated by a marginal decline in crude oil prices and the decision by Bank of Japan (BoJ) to maintain status quo in its monetary policy.

This led the key indices of the Indian equity markets to trade in the red during the mid-afternoon session.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) 84.55 points or 1.06 percent, at 7,895.35 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 26,078.28 points, traded at 25,775.76 points (1.45 p.m.) — 288.36 points or 1.11 percent down from the previous close at 26,064.12 points.

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The Sensex touched a high of 26,100.54 points and a low of 25,761.63 points during the intra-day trade.

In contrast, the BSE market breadth was tilted in favour of the bears — with 1,542 declines and 834 advances.

On Wednesday, both the key Indian indices had marginally ended on a higher note. The barometer index had risen by 57 points or 0.22 percent, while the NSE Nifty had gained 17.25 points or 0.22 percent.

On Thursday, the key indices opened on a flat-to-positive note in sync with their Asian peers which were disappointed after BoJ decided to maintain its monetary policy.

Investors were disappointed as they expected the BoJ to further ease its monetary policy.

Besides, profit booking and unwinding of long positions at the onset of the futures and options (F&O) expiry dented sentiments.

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In addition, the ongoing logjam in parliament dampened sentiments. Investors worried that the logjam might postpone key economic legislation from getting passed.

However, value buying at lower levels and healthy fourth quarter (Q4) results pared some of the initial losses.

The positive commentary from the US FOMC (US federal open market committee) meet also supported prices. The US FOMC expressed confidence in the global economy.

“Sell off and profit bookings on the F&O expiry day dented equity markets. Selling was accelerated after the BoJ decided to maintain status quo in its monetary policy, which strengthened Yen,” Anand James, chief market strategist, Geojit BNP Paribas Financial Services, told IANS.

“Investors were cautious due to the logjam in parliament that has reduced the chances of key economic legislation getting passed.”

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