Weak rupee, foreign fund outflows dent Indian equities (Roundup)

Mumbai, Nov 18 (IANS) Foreign fund outflows, along with a weak rupee and heightened chances of a US rate hike dragged the Indian equity markets lower on Friday.

The key Indian indices witnessed a choppy session only to close the day’s trade in the red, as consumer durables, banking and metal stocks came under heavy selling pressure.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) slipped down by 5.85 points or 0.07 per cent to 8,074.10 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 26,270.20 points, closed at 26,150.24 points — down 77.38 points or 0.30 per cent from the previous close at 26,227.62 points.

The Sensex touched a high of 26,349.02 points and a low of 26,106.78 points during the intra-day trade.

However, the BSE market breadth was marginally tilted in favour of the bulls — with 1,328 advances and 1,253 declines.

On Thursday, the Indian equity markets had closed in the red on the back of weak global cues and lower crude oil prices.

The barometer index was down by 71.07 points or 0.27 per cent, whereas the NSE Nifty edged lower by 31.65 points or 0.39 per cent.

Initially on Friday, the benchmark indices opened on a flat note, as the speech of US Federal Reserve’s Chairman Janet Yellen, which signalled a possible US rate hike in December, cautioned the investors.

A hike can potentially lead foreign portfolio investors (FPI) and funds away from emerging markets such as India, and dent the business margins of corporate sector, as access to capital from the US will become more expensive.

Besides, a massive depreciation in rupee on the back of strong dollar, too, added to the downward trajectory.

The Indian rupee weakened by 32 paise to 68.14 against a US dollar from its previous close of 67.82 to a greenback.

“The rupee is on the weaker side as the US dollar index has risen with US Fed’s Chairman Janet Yellen’s testimony yesterday, pointing at the certainty of the December rate hike,” Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services, told IANS.

“The FIIs (foreign institutional investors) have been on the selling side for the last couple of days, due to which the Indian markets have witnessed a substantial amount of outflows.”

In terms of investments, provisional data with exchanges showed that the FIIs sold stocks worth Rs 988.93 crore, and the domestic institutional investors (DIIs) purchased scrip worth Rs 1,144.15 crore.

According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, IT, banking, pharma, auto and oil-gas stocks witnessed a healthy recovery in the day’s trade.

“However, textile, aviation, media-entertainment and FMCG stocks traded with mixed sentiments,” Desai said.

“Cement and power stocks managed to hold the early gains throughout the session on buying support. Firm USD/INR futures prices pressurised the Indian equity markets throughout the session.”

However, value buying and short covering briefly aided the markets to pare some of their losses.

Sector-wise, the S&P BSE consumer durables index plunged by 136.71 points, the banking index declined by 132.06 points, and the metal index fell by 121.58 points.

In contrast, the S&P BSE healthcare index surged by 192.95 points, the oil and gas index rose by 167.76 points, and the automobile index edged up by 160.90 points.

Major Sensex gainers during Friday’s trade were: NTPC, up 4.58 per cent at Rs 158.60; Sun Pharmaceuticals, up 2.62 per cent at Rs 688.25; Bharti Airtel, up 2.33 per cent at Rs 303.25; Hero MotoCorp, up 2.15 per cent at Rs 2,940; and Mahindra and Mahindra (M&M), up 1.59 per cent at Rs 1,239.05.

Major Sensex losers were: Tata Steel, down 2.00 per cent at Rs 385.10; ITC, down 1.92 per cent at Rs 227.90; Gail, down 1.76 per cent at Rs 427.35; HDFC Bank, down 1.47 per cent at Rs 1,211.60; and Adani Ports, down 1.25 per cent at Rs 260.80.