Profit booking subdues markets, Sensex down 219 points (Third Lead)

Mumbai, Oct 8 (IANS) Profit booking, coupled with caution over the upcoming quarterly results, subdued investor sentiment on Thursday which led to a barometer index of Indian equities trading 219 points down during the late-afternoon trade session.

The Indian equity markets, which had rallied for the past six consecutive sessions till Wednesday, receded following uncertainty over the upcoming Bank of England’s rate hike decision expected later in the day.

On Thursday, the wider 50-scrip Nifty of the National Stock Exchange (NSE) was trading in the red. It was down by 48.05 points or 0.59 percent at 8,129.35 points.

The barometer 30-scrip sensitive index (S&P Sensex) of the Bombay Stock Exchange (BSE), which opened at 27,116.86 points, was trading at 26,816.42 points (3.00 p.m.) — 219.43 points or 0.81 percent down from its previous close at 27,035.85 points.

The Sensex has so far touched a high of 27,120.11 points and a low of 26,762.36 points in the intra-day trade.

Analysts said the markets fell on the back of profit bookings after six consecutive days of rise and were subdued due to investors’ anxiety before the release of second-quarter results.

“Profit booking was witnessed after the six-session rally. Investors were also cautious over the upcoming earnings season — this impacted the markets’ sentiment,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.

James pointed out that caution also prevailed ahead of the release of the US Fed’s FOMC (Federal Open Market Committee) minutes and the Bank of England’s (BoE) monetary policy review. The minutes are of the September 16 meeting in which the US Fed decided not to hike lending rates

“The FOMC minutes could throw insights on the stance taken by the US Fed. If the comments are dovish, or in anyway push the rate hike possibilities until late into 2016, strengthening can be expected in both the equities and currency markets,” James said.

The minutes might also give guidance for this month’s FOMC meeting scheduled for October 27-28.

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 BoE’s policy decision is also being closely monitored by the investors. Any decision from the BoE will give further guidance to the US Fed’s moves,” James added.

Nitasha Shankar, vice president, research with YES Securities, told IANS: “Indian markets continued to consolidate in a tight range on low volumes… however, within this trading range, it is witnessing some profit booking.”

“Broader markets are also under pressure as profit booking is seen across all major sectors. Tech and select PSU (public sector undertakings) banks are bucking the trend,” She added.

Sector-wise, healthcare, banking, capital goods, automobile and fast moving consumer goods (FMCG) stocks came under intense selling pressure.

However, consumer durables and metal sectors made healthy gains.

The S&P BSE healthcare index receded by 195.96 points, banking index declined by 157.59 points, capital goods index was lower by 114.32 points, automobile index fell by 109.68 points and FMCG index dropped by 79.68 points.

The S&P BSE consumer durables index gained 42.40 points and metal index rose by 31.92 points.

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