Global cues, weak rupee subdue Indian equities (Roundup)

Mumbai, Dec 15 (IANS) Negative global indices, coupled with rupee depreciation and outflow of foreign funds, subdued the Indian equity markets on Thursday.

The two benchmark indices — which opened in the red — discounted the much awaited decision of the US Federal Open Market Committee (FOMC) to hike interest rates and brushed off their early losses.

However, selling pressure dragged the key indices to close the day’s trade in the negative territory.

“The US Fed has talked of four rate hikes in 2017 and four in 2018. We need to wait and see how many times the US Fed raises rates,” Union Economic Affairs Secretary Shaktikanta Das said here.

“Indian markets had already factored in the hike in interest rates by 25 bps (basis points) by the US Fed. They will stabilise after some volatility, along with the currency market,” he said.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) inched down by 28.85 points or 0.35 per cent at 8,153.60 points.

The barometer 30-scrip Sensitive Index (Sensex) of the BSE, which opened at 26,497.71 points, closed at 26,519.07 points — down 83.77 points or 0.31 per cent from the previous close at 26,602.84 points.

The Sensex touched a high of 26,737.86 points and a low of 26,407.58 points during the intra-day trade.

The BSE market breadth was tilted in favour of the bears — with 1,317 declines and 1,280 advances.

On Wednesday, the equity markets were suppressed by upcoming global economic events’ risks and weak European indices.

The barometer index was down 94.98 points or 0.36 per cent, while the NSE Nifty edged down by 39.35 points or 0.48 per cent.

“Markets ended lower on Thursday after a volatile session. The Nifty opened sharply lower and then witnessed an equally sharp recovery,” Deepak Jasani, Head of retail research, HDFC Securities, told IANS.

“But selling soon emerged at higher levels and brought the index back into negative territory on the back of weak Asian markets, following aggressive roadmap of interest rate hikes drawn by the US Fed yesterday.”

In a commentary, SMC Global Securities said: “As expected, US Fed hiked 25 bps in the recent meeting and the outlook on further rate hikes was hawkish and this has made the Indian market volatile amid lack of domestic as well as global cues.”

“There is a concern in the market regarding the possible pull out of fund by the foreign market participants. Also the upholding worries about near term economic outlook due to the impact of demonetisation continue to weigh on sentiment of the market participants.”

A weakened rupee on the back of a strong US dollar and outflows of foreign funds also spooked investors.

The Indian rupee weakened by 40 paise to 67.84 against a US dollar from its previous close of 67.44 to a greenback.

In terms of investments, provisional data with exchanges showed that the foreign institutional investors (FIIs) sold stocks worth Rs 611.97 crore, whereas the domestic institutional investors (DIIs) divested scrip worth Rs 177.48 crore.

According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, IT and most banking stocks faced resistance at higher levels in the second half of the session.

“Pharma, oil-gas, textile and media-entertainment stocks traded with bearish sentiments, while FMCG, cement and power stocks traded down due to selling pressure,” Desai explained.

“Firm USD/INR futures prices also pressurised the price movement of Indian equity markets.”

Sector-wise, the S&P BSE healthcare index plunged by 210.49 points, followed by the consumer durables index by 87.66 points, and the automobile index by 64.02 points.

On the other hand, the S&P BSE banking index rose by 61.18 points, the IT index gained 58.14 points, and the Teck (technology, media and entertainment) index inched up by 13.77 points.

Major Sensex gainers on Thursday were: Tata Consultancy Services (TCS), up 2.34 per cent at Rs 2,259.50; Axis Bank, up 2.17 per cent at Rs 477.10; ONGC, up 1.35 per cent at Rs 206.45; Power Grid, up 1.10 per cent at Rs 183.90; and Bajaj Auto, up 0.95 per cent at Rs 2,674.65.

Major Sensex losers were: Sun Pharmaceuticals, down 4.36 per cent at Rs 649.45; NTPC, down 2.02 per cent at Rs 160.30; Tata Motors, down 1.94 per cent at Rs 463.45; ITC, down 1.42 per cent at Rs 229.80; and Bharti Airtel, down 1.24 per cent at Rs 318.45.