Mumbai: Negative global cues coupled with profit booking subdued the Indian equity markets on Tuesday. Consequently, the key indices provisionally closed the day’s trade slightly in the red, as selling pressure was witnessed in metal and healthcare stocks. However, increased chances of a key economic legislation’s passage during parliament’s monsoon session, value buying and positive macro-economic data supported prices at lower levels.
The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged lower by 13.65 points or 0.16 per cent to 8,622.90 points.
The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 28,069.12 points, provisionally closed at 27,981.71 points (at 3.30 p.m.) — down 21.41 points or 0.08 per cent from the previous close at 28,003.12 points. The Sensex touched a high of 28,175.22 points and a low of 27,943.91 points during the intra-day trade.
The BSE market breadth was skewed in favour of the bears — with 1,762 declines and 980 advances. Both the key Indian indices had ended on a lower note during the previous trade session on Monday, on the back of profit booking, along with lower crude oil prices and global event risks.
The barometer index had declined down 48.74 points or 0.17 per cent to 28,051.86 points, while the NSE Nifty edged lower by 1.95 points or 0.02 per cent to 8,636.55 points. Initially on Tuesday, the benchmark indices opened on a higher note despite a negative trend in the Asian markets.
Fresh buying was unleashed, as investors expected the GST (Goods and Services Tax) bill to get passed by the Rajya Sabha when it comes up on Wednesday. Investors are hopeful about the bill’s passage after the Union cabinet last week approved key changes in the proposed legislation.
The amendments in the bill, which is scheduled to be moved by Finance Minister Arun Jaitley in the upper house of the parliament on Wednesday, are expected to sail through with the government scrapping the additional levy of one per cent proposed earlier.
Technically called the Constitution (One Hundred and Twenty-Second Amendment) Bill, 2014, it has proposed to delete Clause 18 of the original bill that intended to compensate the manufacturing states with one per cent additional duty for a period of two years or more for revenue losses.
The pan-India tax reform has been passed by the Lok Sabha but is stuck in the Rajya Sabha, where the government lacks a majority. The upward trend was also supported by steady rupee value and above average monsoon rains. Besides, positive macro economic data released on Monday, like the Purchasing Managers’ Index (PMI) and Eight Core Industries (ECI) output figures aided the equity markets’ rise.
However, profit booking, lower crude oil prices and negative global indices dragged the key indices lower. In addition, caution ahead of major global events risks such as Bank of England’s (BoE) monetary policy review and US jobs data subdued investors’ sentiments.
