Negative global cues, profit booking pull equity markets lower (Roundup)

Mumbai, Oct 7 (IANS) Negative global indices, coupled with caution ahead of earnings announcements and profit booking, pulled the Indian equity markets lower on Friday.

However, the key indices pared some of their losses during the late afternoon session to finally close the day’s trade on a flat-to-negative note.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged down by 11.95 points, or 0.14 per cent, to 8,697.60 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 28,129.22 points, closed at 28,061.14 points — down 45.07 points, or 0.16 per cent, from the previous close at 28,106.21 points.

The Sensex touched a high of 28,155.68 points and a low of 27,964.91 points during the intra-day trade.

The BSE market breadth was tilted in favour of the bears — with 1,402 declines and 1,379 advances.

On Thursday, both the key Indian indices ended in the red due to negative global cues, coupled with lower crude oil prices and a weak rupee.

The barometer index fell by 114.77 points, or 0.41 per cent, while the NSE Nifty edged down by 34.40 points, or 0.39 per cent.

Initially on Friday, the benchmark indices opened on a flat note in sync with their Asian peers.

The global markets, especially the European and Asian markets declined as caution prevailed ahead of key US macro-data on jobs to be released later on Friday.

The US non-farm payrolls data will gauge the likelihood of the US Federal Reserve (US Fed) raising interest rates later this year.

A rate-hike can potentially lead FPIs (Foreign Portfolio Investors) away from emerging markets such as India, and is also expected to dent business margins as access to capital from the US will become expensive.

Besides, the domestic markets were subdued as investors are cautious at the start of the quarter earnings.

The second quarter results season started on October 7. Tata Consultancy Services (TCS) is expected to be the first blue chip firm to come out with its results on October 13.

However, higher crude oil prices, inflow of foreign funds and a marginal appreciation of the rupee helped the key indices to pare some of their losses.

The Indian rupee strengthened by two paise to 66.68 against a US dollar from its previous close of 66.70 to a greenback.

“Negative global cues ahead of US jobs data subdued the equity markets. The European and Asian markets were largely negative ahead of the key announcement by the US Fed,” Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.

“The domestic markets were also dented as caution prevailed over the earnings results, with results of major players like IndusInd Bank, TCS (Tata Consultancy Services) and Infosys scheduled to be announced next week.”

According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, the CNX Nifty traded with sideways to bearish sentiments throughout the session on profit booking at higher levels.

“Firm USD/INR futures prices also pressurised the prices movement of Nifty. IT and banking stocks traded with mixed sentiments,” Desai said.

“Pharma and auto stocks witnessed good recovery from lower levels in second half of the session and traded with mixed sentiments. Aviation stocks faced resistance at higher levels tracking bearish crude oil prices.”

In terms of investments, provisional data with exchanges showed that the foreign institutional investors (FIIs) purchased stocks worth Rs 56.25 crore, whereas the domestic institutional investors (DIIs) bought scrip worth Rs 726.80 crore.

Sector-wise, the S&P BSE IT index plunged 83.37 points, followed by the oil and gas index, which declined by 78.92 points, and the healthcare index fell by 43.40 points.

In contrast, the S&P BSE automobile index surged by 139.94 points, the metal index rose by 101.10 points, and the industrials index gained by 22.12 points.

Major Sensex gainers during Friday’s trade were: Tata Steel, up 4.39 per cent at Rs 406.40; Tata Motors, up 2.62 per cent at Rs 565.70; Bajaj Auto, up 2.10 per cent at Rs 2885.35; Lupin, up 0.95 per cent at Rs 1,498.75; and the Adani Ports, up 0.91 per cent at Rs 267.05.

Major Sensex losers were: Asian Paints, down 1.86 per cent at Rs 1,185.60; Cipla, down 1.63 per cent at Rs 569.70; Infosys, down 1.36 per cent at Rs 1,012.65; HDFC, down 1.28 per cent at Rs 1,405.60; and Bharti Airtel, down 1.01 per cent at Rs 319.60.