Global events' risks suppress Indian equities (Roundup)

Risks of upcoming global economic events, coupled with weak European indices, suppressed the Indian equities markets on Wednesday.

The two benchmark indices, which had opened on a flat note, closed in the red, as domestic investors awaited the decision of the US FOMC (Federal Open Market Committee) on whether or not to raise key interest rates during its monetary policy review later in the evening.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged down by 39.35 points or 0.48 per cent to 8,182.45 points.

The barometer 30-scrip Sensitive Index (Sensex) of the BSE, which opened at 26,707.91 points, closed at 26,602.84 points -- down 94.98 points or 0.36 per cent from the previous close at 26,697.82 points.

The Sensex touched a high of 26,736.34 points and a low of 26,547.05 points during the intra-day trade.

The BSE market breadth was tilted in favour of the bears -- with 1,733 declines and 905 advances.

On Tuesday, the equity markets were lifted by bargain hunting, along with positive Asian and European indices.

The barometer index was up 182.58 points or 0.69 per cent, while the NSE Nifty edged up by 51 points or 0.62 per cent.

"The Nifty opened on a shaky note and gradually slid during the day," Deepak Jasani, head of retail research, HDFC securities, told IANS.

"A sharp bounce back was seen in the afternoon session, but it did not sustain and the markets came down once again on the back of weak European markets."

In a commentary, SMC Global Securities said: "The Nifty, though opened flat today, continued to lose the confidence as investors remained cautious before the Federal Reserve rate decision. As expected market participants remained to wait and watch ahead of Fed outcome on rate hike."

"Though 25 bps (basis points) has been already discounted by the market, however market participants would continue to look forward to the commentary of the US Fed on future rate hike," it said.

A hike can potentially lead foreign portfolio investors (FPI) 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.

Even the key domestic macro-economic inflation data points which showed a deceleration failed to buoy investors' sentiments.

According to data on the wholesale price index (WPI) released by the Commerce and Industry Ministry on Wednesday revealed that India's annual rate of inflation based on wholesale prices eased to 3.15 per cent for November from 3.39 per cent in the previous month.

In addition, data released by the Central Statistics Office (CSO) after market hours on Tuesday reported that India's annual retail inflation eased last month to 3.63 per cent from 4.20 per cent in October.

Further, the Indian rupee strengthened by 10 paise to 67.44 against a US dollar from its previous close of 67.54 to a greenback.

Nevertheless, an outflow of foreign funds spooked investors.

In terms of investments, provisional data with exchanges showed that the foreign institutional investors (FIIs) sold stocks worth Rs 632.29 crore, whereas the domestic institutional investors (DIIs) purchased scrip worth Rs 210.86 crore.

According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, overall selling pressure was seen in Indian equity market throughout the session.

"Banking, pharma, auto, oil-gas, aviation, textile and media-entertainment stocks traded with bearish sentiments," Desai said.

"FMCG, cement and power stocks also traded with bearish sentiments due to selling pressure from traders."

Sector-wise, the S&P BSE metal index plunged by 183.31 points, followed by the capital goods index, which receded by 139.52 points, and the banking index, which fell by 117.65 points.

On the other hand, the S&P BSE IT index rose by 61.69 points, the Teck (technology, media and entertainment) index gained 19.30 points, and the realty index inched up by 6.42 points.

Major Sensex gainers on Wednesday were: Axis Bank, up 3.23 per cent at Rs 466.95; HCL Technologies, up 2.53 per cent at Rs 820; Reliance Industries, up 1.93 per cent at Rs 1,060; Bajaj Finance, up 0.96 per cent at Rs 845.40; and Godrej Consumer Products, up 0.96 per cent at Rs 1,454.90.

Major Sensex losers were: Coal India, down 4.42 per cent at Rs 292.25; Indiabulls Housing Finance, down 3.32 per cent at Rs 647.35; Bosch, down 2.49 per cent at Rs 2,0410.70; Eicher Motors, down 2.16 per cent at Rs 21,806.10; and Aurobindo Pharma, down 2.04 per cent at Rs 703.55.

--IANS

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