Weak PMI data, RBI rate hike halt equity indices' record run (Roundup)

Ending their week-long rally to fresh record levels the domestic equity indices closed in the negative territory on Wednesday.

Investor sentiments were dampened by a decline in a key manufacturing data and the hike in lending rates by the Reserve Bank of India.

The RBI on Wednesday again hiked its key lending rate by 25 basis points to bring the repo to 6.50 per cent citing upside risks to inflation.

Index-wise, the wider Nifty50 on the National Stock Exchange closed at 11,346.20 points, lower by 10.30 points or 0.09 per cent from its previous close. It had touched an all-time high of 11,390.55 points earlier in the day.

The barometer S&P BSE Sensex which had opened at 37,643.87 points, closed at 37,521.62 points, lower by 84.96 points or 0.23 per cent from its previous close of 37,606.58 points. It touched a fresh intra-day high of 37,711.87 points and a low of 37,432.91 points.

In the broader markets, the S&P BSE mid-cap rose 0.19 per cent and the S&P BSE small-cap ended higher by 0.26 per cent from its previous close. The BSE market breadth was tilted towards the bulls with 1,406 advances against 1,296 declines.

"Domestic equity indices opened the day on a positive note but eventually succumbed to selling pressure at higher levels," said Abhijeet Dey, Senior Fund Manager for Equities at BNP Paribas Mutual Fund.

Dey further said the central bank maintained its neutral stance while reiterating that inflation continues to be a major consideration in rate decision. While market reaction to the rate hike was muted, we did see some sharp selling pressure in interest rate sensitive stocks, he added.

"On the other hand, manufacturing conditions across India improved at a modest and slower pace at the start of the quarter, reflecting softer rises in output, new orders and employment," Dey said.

The Nikkei India Manufacturing Purchasing Managers' Index (PMI) posted 52.3 in July, 2018 down from 53.1 in June, 2018.

On the currency front, the rupee closed at 68.44, appreciating by 11 paise from the previous close of 68.55 per dollar.

Investment-wise, provisional data with exchanges showed that foreign institutional investors sold scrip worth Rs 95.94 crore and the domestic institutional investors sold stocks worth Rs 562.33 crore.

Sector-wise, the S&P BSE healthcare index gained the most, by 157.55 points, followed by the oil and gas index, which rose by 148.85 points and the consumer durables index, up 99.56 points.

On the contrary, S&P BSE auto index fell by 189.48 points, the banking index fell 171.09 points and metal index was down 78.96 points.

The major gainers on the Sensex were Coal India, up 3.29 per cent at Rs 270.30; Tata Consultancy Services, up 1.74 per cent at Rs 1,975.10; Sun Pharma, up 1.61 per cent at Rs 575.80; ITC, up 1.51 per cent at Rs 301.70; Power Grid, up 1.02 per cent from Rs 184.05 per share.

The major losers were Vedanta, down 1.84 per cent at Rs 218.15; Bharti Airtel, down 1.80 per cent at Rs 383.65; Maruti Suzuki, down 1.75 per cent at Rs 9,340.30; ICICI Bank, down 1.61 per cent at Rs 299.05; and Tata Steel, down 1.30 at Rs 297.20 per share.

--IANS

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