Weak global cues, profit-booking drag equity markets lower (Roundup)

Mumbai, Sep 20 (IANS) Caution ahead of major global financial events and weak global cues dragged the Indian equity markets lower on Tuesday.

Both the key indices closed the day’s trade in the red as profit-booking and selling pressure at higher levels capped gains.

Heavy selling pressure was witnessed in automobile, banking and IT stocks.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged down 32.50 points, or 0.37 per cent, to 8,775.90 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 28,690.66 points, closed at 28,523.20 points — down 111.30 points or 0.39 per cent from the previous close at 28,634.50 points.

The Sensex touched a high of 28,698.81 points and a low of 28,480.53 points during the intra-day trade.

The BSE market breadth was tilted in favour of the bears — with 1,545 declines and 1,164 advances.

On Monday, the benchmark indices had ended on a flat-to-positive note, as fresh foreign fund inflows, higher crude oil prices and value buying kept the sentiments buoyed.

The barometer index had risen by 35.47 points or 0.12 per cent, while the NSE Nifty edged up by 28.55 points or 0.33 per cent.

“The markets were primarily driven by key global events like the BoJ’s monetary policy review and the US FOMC meet today,” Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.

“Positive comments by Moody’s on the Indian economy and S&P’s growth projection supported markets at lower levels. However, the indices capped gains as investors were reluctant to chase prices higher.”

Initially on Tuesday, the benchmark indices opened on a flat-to-negative note following negative global cues.

Besides, investors were cautious ahead of the US Fed’s Federal Open Market Committee (FOMC) meet and the Bank of Japan (BoJ) monetary policy review announcements.

A rate-hike can potentially lead FPIs (Foreign Portfolio Investors) away from emerging markets such as India, and is also expected to dent business margins as access to capital from the US will become expensive.

Moreover, profit booking, selling pressure at higher levels, outflow of foreign funds and a depreciating rupee led to the key indices capping gains.

The rupee weakened by five paise to 67.01 against a US dollar from its previous close of 66.96 on Monday.

According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, the CNX Nifty traded with bearish sentiments throughout the session mainly due to selling pressure at higher levels and firm USD/INR futures prices.

“IT stocks traded with bearish sentiments on profit booking at higher levels. Banking and auto sector stocks traded with mixed sentiments. Oil-gas stocks witnessed some recovery in the second half of the session on lower levels buying,” Desai said.

“Aviation and textile stocks faced resistance at higher levels due to profit booking, while FMCG and power sector stocks also traded down on selling pressure.”

In terms of investments, provisional data with the exchanges showed that the foreign institutional investors (FIIs) sold stocks worth Rs 1,146.93 crore, whereas the domestic institutional investors (DIIs) purchased scrip worth Rs 777.52 crore.

Sector-wise, the S&P automobile index declined by 139.93 points, followed by the capital goods index, which receded by 80.15 points, and the banking index fell by 71 points.

On the other hand, the S&P BSE metal index gained 32.29 points and the oil and gas index rose by 20.36 points.

Major Sensex gainers during Tuesday’s trade were: ONGC, up 1.48 per cent at Rs 257.75; Tata Steel, up 1.08 per cent at Rs 365.45; Cipla, up 0.70 per cent at Rs 601.90; Maruti Suzuki, up 0.53 per cent at Rs 5,512.85, and Lupin, up 0.39 per cent at Rs 1,548.75.

Major Sensex losers were: Hero MotoCorp, down 2.43 per cent at Rs 3,468.10; Adani Ports, down 2.16 per cent at Rs 270.15; Bajaj Auto, down 1.96 per cent at Rs 2,888.10; Bharti Airtel, down 1.59 per cent at Rs 318.90; and NTPC, down 1.22 per cent at Rs 153.45.

–IANS

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