Results, European stimulus dent markets; Sensex closes flat (Roundup)

Mumbai, Oct 20 (IANS) Caution over ongoing quarterly results, subdued global indices coupled with profit bookings dented Indian equity markets with a barometer index closing flat on Tuesday.

Initially, both the bellwether indices opened flat in line with their Asian peers.

Further denting sentiments were Reserve Bank of India (RBI) Governor Raghuram Rajan’s comments on Monday cautioning the International Monetary Fund (IMF) to stop some countries from initiating policies that might negatively impact global economy.

Negative European markets on the back of diminishing chances of extension of the European Central Bank’s (ECB) stimulus eroded investors’ confidence.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) closed flat during the day’s trade. It ended 13.40 points or 0.16 percent down at 8,261.65 points.

The barometer 30-scrip sensitive index (S&P Sensex) of the Bombay Stock Exchange (BSE), which opened at 27,402.90 points, closed at 27,306.83 points — 58.09 points or 0.21 percent lower from its previous close at 27,364.92 points.

The Sensex touched a high of 27,432.07 points and a low of 27,216.40 points during the intra-day trade.

The barometer index closed the previous trading session on October 19 with gains of 150 points or 0.55 percent.

Analysts pointed out that investors were seen cautious over the upcoming quarterly results and diminishing chances of ECB extending the stimulus package.

“Investors were cautious to chase prices higher due to the results season. The sentiments were impacted by the diminishing chances of ECB extending its stimulus package,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.

The lackluster Asian and European markets negatively impacted the Indian indices.

In Asian markets, Japan’s Nikkei was up 0.42 percent, while Hong Kong’s Hang Sang slipped by 0.37 percent. However, China’s Shanghai Composite index rose by 1.11 percent.

In Europe, London’s FTSE 100 index was lower by 0.31 percent, French CAC 40 declined by 0.77 percent and Germany’s DAX Index edged down by 0.24 percent.

“Investors were anxious ahead of the US Fed’s chairwomen Janet Yallen’s comments, expected later in the day,” James added.

Yallen, who is expected to speak later in the day, is expected to give cues on whether or not the US Fed will raise interest rates its October meeting.

The US Fed will hold its Federal Open Market Committee (FOMC) meet on October 27-28.

The FOMC assumes significance as higher interest rates in the US are expected to lead away FPIs (Foreign Portfolio Investors) from emerging markets such as India.

Vaibhav Agrawal, vice president, research, Angel Broking, told IANS that markets closed on a flat note after lacklustre trading during the session in the absence of any major domestic triggers and subdued global cues.

“Metal stocks came under pressure led by fall in global commodity prices. Hero MotoCorp and ACC are expected to announce results today and both the majors are expected to announce a decline in profits,” Agrawal said.

“We expect markets to continue to remain in a consolidation mode over the coming sessions with some pressure ahead of the F&O (futures and options) expiry next week.”

The Indian rupee too lost strength in the day’s trade. It was down 25 paisa at 65.06 to a US dollar from its previous close of 64.81 to a greenback.

The domestic institutional investors (DIIs) were net sellers in the day’s trade, whereas the foreign institutional investors (FIIs) were net buyers.

According to data with stock exchanges, the DIIs sold stocks worth Rs.354.96 crore and the FIIs picked up stocks worth Rs.523.69 crore on Tuesday.

Nitasha Shankar, vice president, research, with YES Securities, told IANS: “Indian markets ended a volatile session of trade marginally lower led by profit booking in metal and pharma stocks.”

“Further, small cap and midcap indices extended their gains outperforming the headline index as advance decline ratio marginally favoured the bulls.”

Sector-wise, S&P BSE metal index plunged by 136.05 points, oil and gas index receded by 67.31 points and healthcare index declined 60.49 points.

The S&P BSE information technology (IT) index surged by 110.98 points, automobile index augmented by 55.31 points and consumer durables index gained by 54.40 points.

Major Sensex gainers during Tuesday’s trade were: Tata Consultancy Services (TCS), up 1.60 percent at Rs.2,526.70; Tata Motors, up 1.19 percent at Rs.383; Infosys, up 1.18 percent at Rs.1,125.35; Maruti Suzuki, up 1.13 percent at Rs.4,510.65 and Axis Bank, up 0.39 percent at Rs.508.70.

The major Sensex losers were: Vedanta, down 6.42 percent at Rs.101.25; Tata Steel, down 2.96 percent at Rs.240.80; Hindalco Industries, down 2.37 percent at Rs.84.40; Mahindra and Mahindra (M&M), down 2.23 percent at Rs.1,250.95; and Cipla, down 2.13 percent at Rs.672.45.

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