Profit booking, negative global cues drags equity markets lower

Mumbai: Profit booking, along with caution over upcoming quarterly results and negative global cues, dragged the Indian equity markets lower on Tuesday.

This led to the barometer 30-scrip sensitive index (Sensex) of the BSE swinging in the range of over 500 points during the volatile trade session. The key index closed the day’s trade deep in the red.

The barometer index, opened at 25,500.14 points, closed at 25,229.70 points — down 207.27 points or 0.81 percent from the previous close at 25,436.97 points.

The Sensex touched a high of 25,705.96 points and a low of 25,192.94 points during the intra-day trade.

The BSE market breadth was tilted in favour of the bears — with 1,468 declines and 1,173 advances.

Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) ended 58.90 points or 0.75 percent down, at 7,747 points.

On Monday, while the Sensex ended 169.65 points, or 0.66 percent down, the Nifty fell 43.90 points, or 0.56 percent.

Initially, the key indices opened on Tuesday on a positive note. The equity markets took cues from a strong close of the US indices on Monday, even though mixed signals emerged out of Asian markets.

Asian markets were subdued after the International Monetary Fund (IMF) warned about the possibility of a slowdown in China and Japan.

Besides, a key data showed weak manufacturing activity in China during April. The negative Asian cues were mitigated, as some indices in the region were closed on account of the Golden Week holidays.

Notwithstanding, the Indian equity markets rose on the back of short covering, along with expectations that the bankruptcy code will be passed through the parliament and value buying at the lower levels.

In addition, favourable eight core industries data, coupled with healthy volume numbers from auto manufactures for April supported prices.

However, profit booking and caution ahead of Q4 (fourth quarter) results dampened sentiments.

Investors were spooked after European markets opened in the red due to less-than-expected quarterly results.

“The equity markets traded lower on the back of negative global cues and profit bookings,” Anand James, chief market strategist, Geojit BNP Paribas Financial Services, told IANS.

“Negative European markets and disappointing quarterly results from banks dented investors’ sentiments.”

Vaibhav Agarwal, vice president and research head at Angel Broking said that going forward, the equity markets could remain volatile and be influenced by global cues.

“Earnings from heavyweights such as Hero and Siemens could impact market direction further this week,” Agarwal said.

According to Nitasha Shankar, senior vice president for research with YES Securities, broader markets partnered with the headline indices in the correction and ended lower by one percent.

“Media and reality sectorial indices were the lone gainers in trade. Metal, pharma, IT, FMCG and bank indices witnessed sharp fall led by profit booking,” Shankar noted.

Further, the foreign institutional investors (FIIs) were net sellers during the day’s trade, while the domestic institutional investors (DIIs) were net buyers.

Data with stock exchanges showed that FIIs sold stocks worth Rs.755.28 crore and the DIIs purchased scrip worth Rs.484.64 crore.

Sector-wise, stocks of banking, IT (information technology) and healthcare came under intense selling pressure, whereas buying was witnessed in telecom and realty scrip.

The S&P BSE banking index plunged by 193.92 points, followed by the IT index, which receded by 177.16 points; and the healthcare index declined by 112.95 points.

In contrast, the S&P BSE telecom index gained by 27.76 points and the realty index inched up by 4.34 points.

Major Sensex gainers during Tuesday’s trade were Bharti Airtel, up 1.97 percent at Rs.364.90; Asian Paints, up 1.02 percent at Rs.871.55; Adani Ports, up 0.96 percent at Rs.235.90; HDFC Bank, up 0.62 percent at Rs.1,099.50; and Tata Motors, up 0.54 percent at Rs.409.50.

Major Sensex losers during the day’s trade were Coal India, down 3.07 percent at Rs.279.85; BHEL, down 2.58 percent at Rs.124.50; ICICI Bank, down 2.47 percent at Rs.221.35; Lupin, down 2.34 percent at Rs.1,579.15; and Tata Consultancy Services (TCS), down 1.78 percent at Rs.2,480.25.

(For all the latest News, Mumbai, Entertainment, Cricket, Business and Featured News updates, visit Free Press Journal. Also, follow us on Twitter and Instagram and do like our Facebook page for continuous updates on the go)

Free Press Journal