Mumbai : Samvat 2073, or the Hindu accounting calendar, began on a subdued note for Indian equities, as benchmark indices ended marginally down. Equity markets were open on Sunday for special Muhurat trading to mark the occasion of Diwali Laxmi Puja.
Speculation that the US Federal Reserve might raise interest rates when it meets next week prevented investors from buying risky assets, which weighed on equities. Reflecting the anxiety, volatility index India VIX surged 6%, ending at 15.4900.
The Nifty 50 closed at 8625.70, down 12.30 points or 0.1% from the previous close, while the Sensex ended at 27930.21, down 11.30 points. The US Federal Open Market Committee is scheduled to hold a two-day monetary policy meeting starting Tuesday.
Recent commentary from US Fed officials, including from chair Janet Yellen, has increased expectations of a hike in interest rates by the Fed by the end of this year.
Nevertheless, the outlook for Indian equities during the Hindu calendar year remains optimistic because a robust monsoon, the likely rollout of the goods and services tax, and a hike in the pay of government employees and pensioners are expected to drive domestic consumption.
A pick-up in consumption will translate into robust corporate earnings, and, consequently, take equities higher, analysts said.
Given the positive long-term outlook, market participants recommend buying stocks on dips.
Pharmaceutical companies were the flavour of the day. Shares of Cipla, Sun Pharmaceutical Industries, Aurobindo Pharma, and Lupin ended up 0.6-2.0%, as investors shifted their focus to defensive bets from rate-sensitive sectors, ahead of the US Fed meeting.
Shares of Tata Motors and Housing Development Finance Corp ended down 1% each on profit booking. Among those in the mid-cap space, shares of Avanti Feeds slumped 10%, as the company reported dismal earnings for the September quarter. The stock was the worst hit on the Nifty 500 index. Shares of Caplin Point Laboratories ended 5% higher because the company said that the US Food and Drug Administration did not make any major observations during its inspection of the company’s sterile manufacturing unit in Gummidipoondi, Tamil Nadu.
