Profit booking, key events pull equity markets  lower

Mumbai: Profit booking, along with caution ahead of key global and domestic events and negative international indices, plunged the Indian equity markets on Tuesday.

The key indices provisionally closed in the red as heavy selling was witnessed in automobile, healthcare and banking stocks. The wider NSE Nifty declined by 45 points or 0.52 per cent to 8,590.65 points. The barometer 30-scrip Sensex closed at 27,976.52 points, down by 118.82 points or 0.42 per cent from the previous close at 28,095.34 points.

The wider NSE Nifty declined by 45 points or 0.52 per cent to 8,590.65 points. The barometer 30-scrip Sensex closed at 27,976.52 points, down by 118.82 points.

Opened at 28,121.37 points, Sensex touched a high of 28,149.53 points and a low of 27,927.13 points during the intra-day trade. The BSE market breadth was tilted in favour of the bears with 1,642 declines and 1,056 advances. Both the key Indian indices had ended on a higher note during the previous trade session on Monday due to short covering, expectations of key reforms and healthy inflow of foreign funds.

According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, “Nifty faced resistance at higher levels due to profit booking and volatility in USD/INR future prices. IT sector stocks traded with sideways to firm sentiments supported by recovery in USD/INR futures. Most Sugar sector stocks traded down on profit booking.”

On Monday, the equity markets also touched their new closing highs in almost a year. On a closing basis, the NSE Nifty had touched a new 52-week high, whereas the BSE Sensex reached its highest closing levels in 11 months. The barometer index had gained by 292.10 points or 1.05 per cent to 28,095.34 points, while the NSE Nifty edged up by 94.45 points or 1.11 per cent to 8,635.65 points.

Besides, investors were seen cautious ahead of Finance Minister Arun Jaitley’s meeting with his counterparts from the states to discuss proposed amendments to the GST (Goods and Services Tax) Bill.

Besides, investors were seen cautious ahead of Finance Minister Arun Jaitley’s meeting with his counterparts from the states to discuss proposed amendments to the GST (Goods and Services Tax) Bill.

The pan-India tax reform has been passed by the Lok Sabha but is stuck in the Rajya Sabha, where the government lacks a majority. It is widely expected that the bill will be listed for discussion in the Rajya Sabha following Jaitley’s consultations with the Empowered Committee of State Finance Ministers.
Nevertheless, a logjam in Parliament has spooked investors over the prospects of the bill getting passed. In addition, volatility was flared by the start of the US Fed’s FOMC (Federal Open Market Committee) meet.

A hike in the US interest rates can potentially lead FPIs (Foreign Portfolio Investors) away from emerging markets such as India. On the other hand, healthy quarterly earnings, above average monsoon rain falls and value buying supported prices at lower levels.

The meet assumes significance as it will decide whether or not to increase interest rates. A hike in the US interest rates can potentially lead FPIs (Foreign Portfolio Investors) away from emerging markets such as India.
On the other hand, healthy quarterly earnings, above average monsoon rain falls and value buying supported prices at lower levels.

Source: IANS