Growth data, European indices, subdue markets

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SME Times News Bureau | 08 Feb, 2016
Caution over the upcoming domestic economic growth data along with negative European markets and a weak rupee subdued Indian equity markets on Monday.

This led to a barometer index of the Indian equity markets ending the day's trade in the red -- down 330 points.

The Indian equity markets traded flat during a choppy session all throughout the day's trade.

However, they could not sustain even the flat levels and gave way in the last hour of trade, after a weak opening in European markets.

Initially, both the bellwether indices of the Indian equity markets opened on a tentative footing, following the US markets' decline last Friday, after the release of non-farm payrolls data.

Further, investors were seen cautious over the upcoming GDP (gross domestic product) data for the third quarter (Q3) of the current fiscal.

Besides, negative European markets, which declined on the back of receding oil prices and US jobs data, depressed investors' sentiments.

In addition, a weak rupee unnerved investors. It weakened by 30 paise at 67.95 to a US dollar from its previous close of 67.65 to a greenback.

"Better internals of US jobs data along with the ongoing outflows from China caused a weak opening in rupee," Anindya Banerjee, associate vice president for currency derivatives with Kotak Securities, told IANS.

"Later during the day, as European financials slump triggered a sell-off in global equities, including Indian stocks. This resulted in a sharp sell-off in rupee towards the end of day."

Consequently, the barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) receded by 330 points or 1.34 percent.

Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) ended the day's trade in the red. It was lower by 102 points, or 1.36 percent, at 7,387.25 points.

The S&P BSE Sensex, which opened at 24,637.41 points, closed at 24,287.42 points -- down 329.55 points or 1.34 percent from the previous day's close at 24,616.97 points.

It touched a high of 24,698.95 points and a low of 24,196.84 points during the intra-day trade.

The S&P BSE market breadth favoured the bears -- with 1,491 declines and 1,193 advances.

"Indian markets opened on a tentative footing on the back of US markets' decline on last Friday. GDP data release kept investors unnerved," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.

Vaibhav Agarwal, vice president and research head at Angel Broking, elaborated that selling pressure was high in the large cap indices with the BSE midcap and smallcap trading marginally in the negative with an advance decline ratio of 4:5.

"We have a slew of economic data coming out over the coming days with the GDP figure expected today. We expect markets to react to these data points coupled with earnings from some bluechips this week," explained Agarwal.

Nitasha Shankar, vice president for research with YES Securities, cited that volumes picked up in the sell-off suggesting choppy trading sessions going ahead.

"Broader markets also gave up their gains ending in the red. PSU Banks ended in the green with gains of two percent, however, bank index ended in the red led by profit booking in private sector banks," Shankar noted.

"Information Technology (IT), pharma, FMCG, metal and media indices ended lower with significant cuts."

All sector-based indices of the BSE except for telecom and realty sectors ended in the red.

The S&P BSE IT index plunged by 218.23 points, automobile index plummet by 173.35 points, healthcare index receded by 158.83 points, oil and gas index declined by 131.43 points and banking index edged-lower by 100.01 points.

Meanwhile, the S&P BSE telecom index gained 9.27 points and realty index inched-up by 4.32 points.

The foreign institutional investors (FIIs) were net sellers during the day's trade, while the domestic institutional investors (DIIs) bought stocks.

The data with stock exchanges showed that FIIs divested Rs.84.56 crore, while the DIIs' bought stocks worth Rs.279.49 crore.

Major Sensex gainers during Monday's trade were Axis Bank, up 2.38 percent at Rs.408.40; State Bank of India (SBI), up 2.29 percent at Rs.172.05; Bharti Airtel, up 1.27 percent at Rs.311; Lupin, up 0.97 percent at Rs.1,818.90; and Gail, up 0.59 percent at Rs.343.50.

Major Sensex losers during the day's trade were Tata Motors, down 3.94 percent at Rs.323.95; ITC, down 2.72 percent at Rs.315.10; ONGC, down 2.43 percent at Rs.214.60; Sun Pharma, down 2.42 percent at Rs.836.10; and Tata Consultancy Services (TCS), down 2.36 percent at Rs.2,368.50.