Slower manufacturing, profit bookings dent markets; Sensex ends flat (Roundup)

A slowdown in manufacturing activity and a pickup in profit bookings subdued Indian equity markets on Thursday. This led a barometer index of the Indian equities to close flat at the end of the day's trade.

The barometer 30-scrip sensitive index (S&P Sensex) of the Bombay Stock Exchange had previously on Wednesday closed with gains of 376 points or 1.46 percent.

Initially, the markets made healthy gains on Thursday and continued their upward trajectory on the back of Tuesday's monetary easing by the Reserve Bank of India (RBI), supportive Asian markets and strengthening rupee value.

The markets at one point of time had gained 277 points -- however, the upward momentum lost steam as the latest Nikkei India Manufacturing PMI (Purchasing Manufacturers Index) for the last month showed a contraction.

The PMI was at a seven-month low of 51.2 in September.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) also ended the day's trade on a flat note. It closed marginally up by 2.00 points or 0.03 percent at 7,950.90 points.

The S&P BSE Sensex which opened at 26,344.19 points, closed at 26,220.95 points -- 66.12 points or 0.25 percent up from the previous day's close at 26,154.83 points.

The Sensex touched a high of 26,431.80 points and a low of 26,168.71 points in the intra-day trade.

Markets analysts said the less-than-expected PMI data impacted sentiments and erased the gains made during the day's trade, as profit booking was also witnessed.

"The rally that had continued on the back of the more-than-expected monetary easing by the RBI, strengthening rupee value and positive Asian markets halted as a negative PMI data impacted sentiments," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.

Vaibhav Agrawal, vice president, research, Angel Broking, told IANS: "Markets opened on a strong note but has given up most of its gains led by profit booking."

Agrawal expects the selling pressure to resume as global triggers continue to remain negative.

"Uncertainty around the US Fed rate hike and lack of growth in Europe and China would continue to cause high volatility," Agarwal cited.

Even the International Monetary Fund (IMF) chief Christine Lagarde's assessment of the global economic conditions spooked investors.

Lagarde cautioned investors regarding the weakness in growth and said that she was concerned about the state of global affairs.

Gaurav Jain, director with Hem Securities said that firm global markets supported the indices to open the day higher however washed off major gains as investors prefer to unwind positions ahead of the long weekend.

"Strong rupee kept the sentiment positive," Jain said.

The rupee continued to gain strength on Thursday. It gained 7 paise and closed at 65.51 against a US dollar around 5.00 p.m. from its previous close of 65.58 against a greenback. It touched a day's low of 65.48 against a US dollar.

The Indian rupee had gained 38 paise on Wednesday to close at a five-week high of 65.58 against the US dollar.

The positive Asian markets have supported sentiments here. Japan's Nikkei index was higher by 1.92 percent. The Chinese markets -- Hong Kong's Hang Seng index and Shanghai Composite Index -- will remain closed till October 7, Wednesday, on account of the Chinese national day.

"There is an expectation of a stimulus package announcement in Japan. This is driving the upward trend in the Asian markets and concurrently supporting our indices here," James said.

Sector-wise, healthcare, capital goods and consumer durables witnessed healthy buying support. On the other hand, automobile, banking and information technology (IT) index came under heavy selling pressure.

The S&P BSE healthcare index zoomed by 260.11 points, capital goods index increased by 110.89 points and consumer durables index was higher by 96.29 points.

However, the S&P BSE automobile index receded by 78.81 points, banking index declined by 73.37 points and IT index was lower by 27.25 points.

Major Sensex gainers during Thursday's trade were: Lupin, up 3.62 percent at Rs.2,107.05; Sun Pharma, up 2.57 percent at Rs.890.75; Tata Consultancy Services (TCS), up 2.01 percent at Rs.2,639.70; Dr.Reddy's Lab, up 1.80 percent at Rs.4,230.05; and Larsen and Toubro (L&T), up 1.54 percent at Rs.1,489.30.

The major Sensex losers were: BHEL, down 2.85 percent at Rs.199.70; Gail, down 2.60 percent at Rs.294.25; Maruti Suzuki, down 2.33 percent at Rs.4,579.85; Vedanta, down 1.82 percent at Rs.83.55; and HDFC, down 1.15 percent at Rs.1,199.25.

The Indian markets will remain closed on Friday on account of Gandhi Jayanti.