Profit booking suppresses equity markets

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SME Times News Bureau | 29 Jul, 2016
Profit booking, along with negative global cues and foreign fund outflows, suppressed the Indian equity markets on Friday.

Consequently, both the key indices closed the day's trade in the red, as heavy selling pressure was witnessed in banking, consumer durables, and capital goods stocks.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged down by 27.80 points or 0.32 per cent to 8,638.50 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 28,232.87 points, closed at 28,051.86 points -- down 156.76 points or 0.56 per cent from the previous close at 28,208.62 points.

The Sensex touched a high of 28,233.47 points and a low of 28,037.87 points during the intra-day trade.

The BSE market breadth was tilted in favour of the bears -- with 1,480 declines and 1,200 advances.

On Thursday, the benchmark indices closed higher, prompted by expectations of the GST (Goods and Services Tax) bill clearing parliament, short covering and fresh influx of foreign funds.

The barometer index had gained 184.29 points or 0.66 per cent, while the NSE Nifty edged up 50.50 points or 0.59 per cent.

Initially on Friday, the markets opened on a flat note, in sync with their Asian peers.

The Asian markets, especially the Japanese indices, fell ahead of the Bank of Japan's (BoJ) monetary policy review. However, they recovered slightly after the BoJ's announcement for more stimulus support.

Moreover, volatility that was flared by the futures and options (F&O) expiry on Thursday led the investors to book profits and hampered the market's upward trajectory.

Besides, some cautiousness prevailed in the markets on the chances of the GST (Goods and Services Tax) Bill getting passed during parliament's ongoing monsoon session.

Further, lower global crude oil prices, too, eroded investors' confidence.

Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services elaborated that nervous Asian markets ahead of BoJ announcement as well as steady decline in oil prices deflated positive sentiments and prompted buyers to withdraw.

“While earnings of FMCG (fast moving consumer goods), auto, public sector and private banks will be in focus, there will be enough distraction on the data front, with manufacturing PMI (purchasing manager's index) and eight core industrial output scheduled for release on Monday,” James said.

According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, bank Nifty witnessed some profit booking at higher levels and traded down.

"IT and banking sector stocks traded with mix sentiments while pharma stocks managed to sustain gains on support of fresh buying sentiments," Desai noted.

"Aviation stocks continued on firm sentiments tracking selling pressure in crude oil prices. Sugar stocks resumed upswing on strong fundamentals."

In terms of investments, the provisional data with exchanges showed that the foreign institutional investors (FIIs) sold stocks worth Rs 14.02 crore, while the domestic institutional investors (DIIs) purchased scrip worth Rs 148.34 crore.

Sector-wise, the S&P BSE banking index plunged by 138.39 points, followed by the consumer durables index, which declined by 114.95 points, and the capital goods index dropped by 113.56 points.

In contrast, the S&P BSE automobile index surged by 165.86 points, followed by the healthcare index, which edged up by 116.36 points, and the oil and gas index rose by 53.51 points.

Major Sensex gainers during Friday's trade were: Adani Ports, up 2.95 per cent at Rs 231.95; Lupin, up 2.15 per cent at Rs 1,740.75; Bajaj Auto, up 1.56 per cent at Rs 2,702; Cipla, up 1.47 per cent at Rs 528.15; and Hindustan Unilever (HUL), up 1.47 per cent at Rs 921.50.

Major Sensex losers were: ICICI Bank, down 3.40 per cent at Rs 262.85; Bharti Airtel, down 2.70 per cent at Rs 362.05; HDFC, down 1.92 per cent at Rs 1,374.35; Wipro, down 1.45 per cent at Rs 545.30; and Larsen and Toubro (L&T), down 1.20 per cent at Rs 1,558.