Upcoming macro data dents markets; Sensex down 208 points (Roundup)

Mumbai, Dec 11 (IANS) Upcoming macro-economic data coupled with the logjam in parliament affecting passage of key economic bills and a likely US rate hike spooked investors on Friday, resulting in a barometer index shedding 208 points.

Initially, both the bellwether indices of the Indian equity markets opened on a positive note. But both soon ceded their gains due to the continued parliamentary logjam which has reduced the prospects of the Goods and Services Tax (GST) bill getting passed during the ongoing winter session.

Should the bill not secure clearance in this session, it will miss its intended roll-out date of April 1 next year.

In addition, upcoming domestic macro-economic data on monthly industrial production and a likely US rate hike depressed the markets.

Figures for the index of industrial production (IIP) are expected to be released after market hours.

After Friday’s release of the IIP figures, the data points for consumer price index (CPI) and wholesale price index (WPI) will be released on Monday, followed by the US Federal Reserves FOMC (Federal Open Market Committee) meet on Wednesday.

The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) declined by 208 points or 0.82 percent during the day’s trade.

Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) closed in the red. It ended lower by 72.85 points or 0.95 percent at 7,610.45 points.

The Sensex of the S&P Bombay Stock Exchange (BSE), which opened at 25,281.77 points, closed at 25,044.43 points — down 207.89 points or 0.82 percent from the previous day’s close at 25,252.32 points.

The Sensex touched a high of 25,316.14 points and a low of 24,930.43 points during the intra-day trade.

The barometer index had gained 216 points or 0.86 percent on Thursday after six consecutive sessions of losses.

Market observers pointed out that investors were on a ‘risk-off mode’ in the absence of any fresh triggers coupled with a growing possibility that the government won’t be able to pass key economic legislations during the ongoing winter session of parliament.

“Markets are on a risk-off mode with very little to cheer about. There is a growing consensus amongst investors that the current parliament session is going to be a washout,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.

“Investors are cautious ahead of a string of events that are lined-up including IIP, CPI, WPI and FOMC decision.”

Vaibhav Agarwal, vice president and research head at Angel Broking said that selling pressure continued during the day’s trade after the small relief rally on Thursday after foreign investors continued to sell ahead of the FOMC meet.

“FIIs have been net sellers over the last six sessions, unwinding their positions before the rate hike is announced. Investors also remained cautious ahead of the IIP and inflation data,” Agarwal said.

“We expect markets to continue to trade within a narrow band in the absence of any major triggers, with a negative bias on account of FII outflows.”

Nitasha Shankar, vice president for research with YES Securities: “Banking stocks came under severe selling pressure as PSU (public sector undertaking) banks witnessed fresh selling.”

“Broader markets also declined in line with the headline indices. All major sectors came under selling pressure closing deep in the red barring the metal and pharma indices.”

Besides equities, the Indian rupee, too, declined in the day’s trade. It weakened by 17 paise at 66.89 to a US dollar from its previous close of 66.72 to a greenback.

Both foreign institutional investors (FIIs) and the domestic institutional investors (DIIs) were net buyers during the day’s trade.

According to data with stock exchanges, FIIs bought stocks worth Rs.253.73 crore, while DIIs invested Rs.292.88 crore.

Sector-wise, healthy buying was witnessed in banking, automobile,capital goods, consumer durables and oil and gas sectors.

On the other hand, metal and information technology (IT) scrip bucked the trend.

The S&P BSE banking index plunged by 428.42 points, automobile index receded by 310.09 points, capital goods index declined by 190.39 points, consumer durables index was lower by 175.97 points and oil and gas index fell by 66.94 points.

The S&P BSE metal index gained by 16.15 points and IT index was up 14.83 points.

Major Sensex gainers during Friday’s trade were Tata Steel, up 3.41 percent at Rs.240.90; Hindalco Industries, up 0.73 percent at Rs.76.30; Cipla, up 0.66 percent at Rs.639.40; Hindustan Unilever, up 0.60 percent at Rs.820.95; and Infosys, up 0.57 percent at Rs.1,052.35.

The major Sensex losers were ICICI Bank, down 3.60 percent at Rs.249.35; Tata Motors, down 2.92 percent at Rs.377.95; Mahindra and Mahindra (M&M), down 2.23 percent at Rs.1,262.30; Axis Bank, down 2.22 percent at Rs.439.80; and State Bank of India (SBI), down 2.09 percent at Rs.227.10.

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