Key Indices Pare Early Gains As Global Worries Persist

Mumbai: Equities on the domestic bourses couldn't sustain the early gains on Monday as investors turned cautious in the wake of lackluster global trend. Reversing the trend later, BSE Sensex fell about 144 points to end at an over 3-month low.

The BSE index ended lower by 143.63 points, or 0.52 per cent, at 27,529.97, its lowest close since July 8. The gauge had edged up 30 points in the last session on Friday. The NSE Nifty closed lower by 63 points, or 0.73 per cent, at 8,520.40. Intra-day, it shuttled between 8,615.40 and 8,506.15.

The numbers from both TCS and Infosys fell short of the crease as investors did not seem impressed. What clouded sentiment further was US Fed chief Janet Yellen's commentary on the US economy, indicating the need for aggressive steps to reboot it. The effect was immediate as indices globally started turning weak.

Shares of state-run oil retailers such as Bharat Petroleum, Indian Oil and Hindustan Petroleum fell after rising over one per cent each in early deals due to a hike in petrol and diesel prices. Investors are betting on a hike in interest rates by the US Fed before the end of this year, brokers said, adding that profit-booking only hastened the fall.

Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services, said: "Nervous global markets following Fed chair's comments last Friday, and sustained selling by FIIs seen all through last week look to have pricked sentiment, sparking long liquidation."

Barring banking, all sectors ended lower with auto, capital goods and realty closing down by up to 2.12 per cent.

As many as 24 stocks in the Sensex group fell and only six rose. M&M was battered the most as it plunged by 3.22 per cent, followed by Hero MotoCorp (2.24 per cent), Asian Paints (2.07 per cent), HDFC Bank (1.87 per cent), Bajaj auto (1.80 per cent), L&T (1.71 per cent) and RIL (1.67 per cent). Banking shaped up well as concerns about bad loans eased after Russian Rosneft-led group took over private oil firm Essar Oil in an all-cash deal valued at about $13 billion. ICICI Bank surged the most since March, climbing 6.91 per cent. SBI too ended higher by 0.48 per cent.

Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services, said: "Selling continues as investors are waiting for more cues on earnings growth and guidance. The market is nearing the support level of 8500 and is likely to be volatile due to the weakness in global market ahead of ECB meet this week."

BSE auto suffered the most by falling 2.12 per cent followed by capital goods (1.47 per cent), realty (1.19 per cent) and metal (1.19 per cent). Broader markets put up a similar show, with the mid-cap index falling 0.95 per cent and small-cap dropping 0.52 per cent.

Foreign portfolio investors (FPIs) sold shares worth a net Rs 946.42 crore on Friday, showed provisional data. Regional markets were mostly lower with China's Shanghai Composite falling 0.47 per cent and Hong Kong's Hang Seng 0.82 per cent. Japan's Nikkei rose 0.26 per cent.

Europe was in the grip of weakness as investors remained cautious ahead of earnings amid speculation about ECB policy as concern resurfaced about the health of the global economy. London's FTSE declined 0.78 per cent, Paris CAC 30 0.55 per cent and Frankfurt's DAX 0.54 per cent in their early session.

Foreign portfolio investors (FPIs) sold shares worth a net Rs 946.42 crore on Friday, showed provisional data. Regional markets were mostly lower with China’s Shanghai Composite falling 0.47 per cent and Hong Kong’s Hang Seng 0.82 per cent. Japan’s Nikkei rose 0.26 per cent.

The market breadth turned negative as 1,513 stocks ended in the red, 1,290 closed in the green while 175 ruled steady. The total turnover on BSE stood at Rs 3,884.29 crore, higher than Rs 3,423.38 crore registered during the previous trading session.

Rupee Tumbles 12 Paise On US Rate Hike Calls

The rupee turned weak by 12 paise to 66.83 against the US dollar at the foreign exchange (forex) market after the American currency gained ground following a spurt in demand from importers. Dealers said strength in the dollar against some other currencies overseas on the prospects of higher US rates also weighed on the rupee, but a higher opening in the domestic equity market meant the losses were limited.

On Friday, the rupee had staged a smart recovery from its three-week low against the US currency to close up by 23 paise at 66.71 on heavy corporate dollar sales as well as easing inflationary pressure.

Source: PTI