Foreign funds outflows pull Indian equities lower (Roundup)
Mumbai, Dec 21 (IANS) Massive outflow of foreign funds, coupled with negative global indices and profit booking, pulled the Indian equity markets lower for the sixth consecutive session on Wednesday.
The key indices which opened in the green in sync with their Asian peers, closed the day’s trade on a flat note — marginally in the red — as heavy selling pressure was witnessed in IT, FMCG and capital goods stocks.
Besides, investors were cautious ahead of the release of minutes of the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) meet.
On December 7, RBI had kept its key lending rates unchanged, citing global and local uncertainties and also lowered the country’s growth forecast for 2016-17.
The wider 51-scrip Nifty of the National Stock Exchange (NSE) inched down by 21.10 points or 0.26 per cent to 8,061.30 points.
The barometer 30-scrip Sensitive Index (Sensex) of the BSE, which opened at 26,368.88 points, closed at 26,242.38 points — down 65.60 points or 0.25 per cent from the previous close at 26,307.98 points.
The Sensex touched a high of 26,396 points and a low of 26,213.51 points during the intra-day trade.
The BSE market breadth was tilted in favour of the bears — with 1,415 declines and 1,172 advances.
“Intense selling in the last one hour of trade brought the indices into negative territory towards the close,” Deepak Jasani, Head – Retail Research, HDFC Securities, told IANS.
“Global markets, too, were not supportive as all the major Asian markets closed with losses, barring the Shanghai and Hang Seng indices. European indices like FTSE and CAC 40 too were in the negative territory.”
On Tuesday, the benchmark indices had crashed to their lowest level for the last two weeks on the back of weak global cues.
The barometer index had closed lower by 66.72 points or 0.25 per cent, while the NSE Nifty slipped by 21.95 points or 0.27 per cent.
“Though the market opened on a green note but couldn’t sustain due to weak volumes in the markets and ended the day in red zone,” SMC Global Securities said in a commentary to IANS.
“Actually, the market is looking for the fresh trigger but weakening rupee continued to dent the confidence of the market participants.”
According to the stock brokerage firm, after hitting a two-week low in Tuesday’s session, the Indian rupee recovered marginally during Wednesday’s trade on the back of some selling pressure in the US currency from domestic companies and banks.
The Indian rupee strengthened by 13 paise to 67.91 against a US dollar from its previous close of 68.04 to a greenback.
“However, gains were limited as sustained capital outflow kept the currency under pressure along with strong dollar overseas,” the commentary said.
In terms of investments, provisional data with exchanges showed that the FIIs (Foreign Institutional Investors) sold stocks worth Rs 1,178.08 crore, whereas the domestic institutional investors (DIIs) purchased scrip worth Rs 1,057.96 crore.
Dhruv Desai, Director and Chief Operating Officer of Tradebulls, pointed out that volatile USD/INR futures prices pressurised the price movement of Indian equity market at higher levels.
“IT, banking, pharma, auto, oil-gas and FMCG stocks faced resistance at higher levels due to selling pressure,” Desai elaborated.
“Media-entertainment, textile, cement and power stocks traded with mixed sentiments due to profit booking.”
Sector-wise, the S&P BSE IT index fell by 76.20 points, followed by the FMCG index which receded by 74.94 points, and the capital goods index which declined by 54.28 points.
On the other hand, the S&P BSE consumer durables index surged by 74.46 points, the metal index gained 51.67 points, and the oil and gas index rose by 44.15 points.
Major Sensex gainers on Wednesday were: NTPC, up 1.24 per cent at Rs 163.80; Mahindra and Mahindra (M&M), up 1.22 per cent at Rs 1,193.15; Lupin, up 1.17 per cent at Rs 1,465.95; Maruti Suzuki, up 0.83 per cent at Rs 5,144.65; and ONGC, up 0.78 per cent at Rs 201.45.
Major Sensex losers were: Sun Pharmaceuticals, down 2.25 per cent at Rs 614.40; ITC, down 1.44 per cent at Rs 226.10; Tata Consultancy Services (TCS), down 1.07 per cent at Rs 2,312.75; Hero MotoCorp, down 1.00 per cent at Rs 3,026.65; and Wipro, down 0.91 per cent at Rs 462.55.