Disappointing macro-data, profit booking dent markets

Disappointing macro-economic data, along with profit booking, dragged the Indian equity markets lower on Friday.

Consequently, the key indices traded deep in the red during the mid-afternoon session.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged down 98.30 points or 1.24 percent, at 7,802.10 points.

The barometer 30-scrip BSE sensitive index (Sensex), which opened at 25,739.94 points, traded at 25,449.46 points (at 2.00 p.m.) -- down 340.76 points or 1.32 percent from the previous close at 25,790.22 points.

The Sensex has so far touched a high of 25,743.69 points and a low of 25,400.27 points during the intra-day trade.

The BSE market breadth was heavily tilted in favour of the bears - with 1,504 declines and 890 advances.

Both the key indices had ended with substantial gains during the previous trade session on Thursday. The barometer index had gained 193.20 points or 0.75 percent, while the NSE Nifty had edged up by 51.55 points or 0.66 percent.

Initially, the equity markets opened on a flat-to-negative note on Friday, a day after key macro-economic data showed a rise in retail inflation, even as mixed signals emerged from Asian indices.

Investors were disappointed after the Consumer Price Index (CPI) showed a rise in April. The annual retail inflation for last month rose to 5.39 percent from 4.83 percent in March.

The rise in the CPI has reduced the chances of the Reserve Bank of India (RBI) reducing its key lending rates during the monetary policy review scheduled in June.

Apart from the CPI, investors' sentiments were subdued by a flat growth in the country's factory output for March. The Index of Industrial Production (IIP) for March rose negligibly by 0.1 percent from a rise of two percent in February.

Besides, profit booking was triggered after the equity markets reached their pre-Wednesday levels, which dragged the key indices lower.

In addition, lower crude oil prices and selling pressure in the banking sector dampened sentiments.

However, equity markets pared some of their losses on the back of value buying.

"Profit booking after the markets reached their pre-Wednesday levels dragged the key indices lower," Anand James, chief market strategist, Geojit BNP Paribas Financial Services, told IANS.

"Besides, investors' sentiments were subdued after Thursday's disappointing macro-economic data reduced chances of a RBI rate cut in June."

--IANS

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