Profit booking subdues markets, Sensex down 221 points

Profit booking, coupled with caution over the upcoming quarterly results, subdued investor sentiment led to a barometer index of Indian equities trading 221 points down during the mid-afternoon trade session on Thursday.

Furthermore, the Indian equity markets, which had rallied for the past six consecutive sessions till Wednesday, receded following uncertainty over the upcoming Bank of England's rate hike decision expected later in the day.

On Thursday, the wider 50-scrip Nifty of the National Stock Exchange (NSE) was trading in the red. It was down by 57.15 points or 0.70 percent at 8,120.25 points.

The barometer 30-scrip sensitive index (S&P Sensex) of the Bombay Stock Exchange (BSE), which opened at 27,116.86 points, was trading at 26,815.11 points (2.15 p.m.) -- 220.74 points or 0.82 percent down from its previous close at 27,035.85 points.

The Sensex has so far touched a high of 27,120.11 points and a low of 26,790.17 points in the intra-day trade.

Analysts said the markets fell on the back of profit bookings after six consecutive days of rise and were subdued due to investors' anxiety before the release of second-quarter results.

"Profit booking was witnessed after the six-session rally. Investors were also cautious over the upcoming earnings season -- this impacted the markets' sentiment," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.

James pointed out that caution also prevailed ahead of the release of the US Fed's FOMC (Federal Open Market Committee) minutes. The minutes are of the September 16 meeting in which the US Fed decided not to hike lending rates

"The FOMC minutes could throw insights on the stance taken by the US Fed. If the comments are dovish, or in anyway push the rate hike possibilities until late into 2016, strengthening can be expected in both the equities and currency markets," James said.

The minutes might also give guidance for this month's FOMC meeting scheduled for October 27-28.

With higher interest rates in the US, the FPIs (Foreign Portfolio Investors) are expected to be led away from emerging markets such as India.

Nitasha Shankar, vice president, research with YES Securities, told IANS: "Indian markets continued to consolidate in a tight range on low volumes... however, within this trading range, it is witnessing some profit booking."

"Broader markets are also under pressure as profit booking is seen across all major sectors. Tech and select PSU (public sector undertakings) banks are bucking the trend," She added.

Sector-wise, healthcare, banking and capital goods stocks came under intense selling pressure.

However, consumer durables and metal sectors made healthy gains.

The S&P BSE healthcare index receded by 175.03 points, banking index declined by 166.48 points and capital goods index fell by 126.72 points.

The S&P BSE consumer durables index gained 54.11 points and metal index rose by 27.25 points.