Disappointing macro-data, profit booking dent markets (Third Lead)

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 late-afternoon session.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged down 87.50 points or 1.11 percent, at 7,812.90 points.

The barometer 30-scrip BSE sensitive index (Sensex), which opened at 25,739.94 points, traded at 25,486.36 points (at 3.00 p.m.) -- down 303.86 points or 1.18 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 1,507 declines and 960 advances.

Both the key indices had ended with substantial gains during the previous trade session on Thursday, as positive domestic cues, including parliamentary approval for a key economic legislation lifted prices.

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, a slide in 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.

"The profit booking momentum was strengthened after yesterday's disappointing macro-economic data."

According to Vaibhav Agarwal, vice president and research head at Angel Broking, equity markets opened on a negative note led by weak Asian indices.

"The trigger for the losses was data showing acceleration in consumer price inflation in April 2016, which triggered speculation that the RBI would hold off on cutting rates at its policy review next month," Agarwal said.

--IANS

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