Lame results, inflation trends subdue markets; Sensex down 67 points

Mumbai: Firming up of food inflation, disappointing quarterly results and weak global cues subdued investor sentiments and led to a barometer index of the Indian equities shedding 67 points or 0.25 percent on Wednesday. Initially, both the Indian bellwether indices were impacted by negative macro data coming out of China. The cascading effect of negative Asian markets soon subdued sentiments here.

The domestic macro data on the annual wholesale inflation for September too disappointed investors, as it firmed up slightly due to higher food prices.

The WPI increased slightly at (-)4.54 percent in September from (-)4.95 percent for the previous month. Food inflation in the month under review edged up by 0.69 percent — from a decline of 1.13 percent recorded in August.

The wholesale inflation coupled with the consumer price index (CPI) and index of industrial production (IIP) data led economists and analysts to predict that the Reserve Bank of India (RBI) will maintain a status quo in key lending rates for the rest of the calendar year.

Retail inflation for September, based on the CPI increased to 4.41 percent — from 3.74 percent recorded for the previous month. While, the IIP data for August grew the fastest in the last three years accelerating to 6.4 percent.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) closed the day’s trade marginally in the red. It was lower by 23.80 points or 0.29 percent at 8,107.90 points.

The barometer 30-scrip sensitive index (S&P Sensex) of the Bombay Stock Exchange (BSE), which opened at 26,760.32 points, closed at 26,779.66 points — 66.87 points or 0.25 percent down from its previous close at 26,846.53 points.

The Sensex touched a high of 26,869.08 points and a low of 26,713.28 points during intra-day trade.

The barometer index closed on Tuesday at a loss of 57.58 points or 0.21 percent.

Analysts pointed out that negative domestic and Chinese data points coupled with disappointing quarterly results had impacted the markets.

“The negative Asian markets due to the fall in Chinese consumer sentiment which was indicated in lower inflation numbers impacted the Indian indices,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.

In Asian markets, Japan’s Nikkei closed the day’s trade down 1.89 percent. Hong Kong’s Hang Sang closed 0.71 percent. China’s Shanghai Composite index declined by 0.95 percent.

“Investors are cautious to chase prices at the beginning of the results season. The sentiments were further dampened by the slight rise in the food inflation in the WPI,” James said.

Global software major Infosys was the first bluechip to come out with its results on Monday. It dampened the markets with a weak guidance on revenue growth.

On Tuesday, Tata Consultancy Services (TCS) reported that its net profit increased by 14.5 percent year-on-year and 6.1 percent sequentially to Rs.6,055 crore under the Indian accounting standard.

The domestic institutional investors (DIIs) were net sellers in the day’s trade.

According to data with stock exchanges, the DIIs sold stocks worth Rs.207.63 crore and the foreign institutional investors (FIIs) bought stock worth Rs.121.75 crore in the day’s trade.

Notwithstanding the downward trend, the Indian rupee strengthened in the day’s trade. It closed the day’s trade up 15 paise at 65.04 (65.035) to a US dollar from its previous close at 64.19 to a greenback.

Nitasha Shankar, vice president, research with YES Securities, told IANS: “Small cap and midcap indices marginally outperformed as market breadth was in a tad bit favour of the bulls.”

“Metal stocks resumed its upward journey after a day of selling. information technology (IT) and media stocks remained under pressure after disappointing set of results.”

Sector-wise, S&P BSE IT index plunged by 147.08 points, automobile index receded by 129.53 points and technology, entertainment and media (Teck) fell by 70.87 points.

The S&P BSE consumer durables index increased by 163.88, healthcare index gained 64.22 points and oil and gas index inched up by 6.38 points.

Major Sensex gainers during Wednesday’s trade were: Hindalco Industries, up 3.14 percent at Rs.88.70; Lupin, up 1.91 percent at Rs.2,062; Tata Steel, up 1.14 percent at Rs.248; HDFC, up 1.08 percent at Rs.1,291.10; and Reliance Industries, up 1.06 percent at Rs.902.

The major Sensex losers were: TCS down 4.39 percent at Rs.2,483.40; Tata Motors, down 2.40 percent at Rs.352.30; Hindustan Unilever, down 1.85 percent at Rs.797.40; Coal India, down 1.72 percent at Rs.334.65; and ICICI Bank, down 1.58 percent at Rs.282.85.

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