Mumbai, Oct 7: Caution over the upcoming quarterly results, rising crude prices and profit bookings subdued investor sentiment and led a barometer index of Indian equities to trade flat during the late-afternoon session on Wednesday.
Furthermore, both bellweather indices of the Indian equity markets, which had rallied for the past five consecutive sessions, receded a day after the International Monetary Fund (IMF) report downgraded India’s growth to 7.3 percent for the current fiscal.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) was trading flat. It was marginally up by 19.65 points or 0.24 percent to 8,172.55 points.
The barometer 30-scrip sensitive index (S&P Sensex) of the Bombay Stock Exchange (BSE) which opened at 26,966.86 points, was trading at 26,971.42 points (3.00 p.m.) – 38.54 points or 0.14 percent up from its previous close at 26,932.88 points.
The BSE Sensex has so far touched a high of 27069.33 points and a low of 26,877.51 points in the intra-day trade.
On Tuesday, the S&P BSE Sensex closed with gains of 147 points or 0.55 percent. Tuesday was also the fifth consecutive session of gains for the index.
Market analysts pointed out that investors’ anxiety before the release of second quarter results, rising crude prices and downgrade of growth rate has subdued the markets.
“Anxiety over the upcoming earnings season has impacted the investors’ sentiments. Tuesday’s IMF’s growth rate downgrade and rising crude oil prices have also caused worries for the investors,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told.
The second quarter results season has started from Monday. Infosys is expected to be the first blue chip to come out with its results on October 12. The earlier guidance by some information technology (IT) companies of lower earnings has caused caution. The equities were also depressed on the account of growth downgrade by the IMF. The IMF, in its World Economic Outlook, lowered India’s growth forecast from 7.5 percent to 7.3 percent for 2015-16.
The IMF’s move follows similar downgrades. Earlier, the Asian Development Bank (ADB) had cut the growth outlook from 7.8 percent to 7.4 percent. Another major dampener came as international crude oil prices rose sharply in the past few days and are hovering around the $50 mark.
The jump in the oil prices comes after the US Energy Information Administration cited lower inventory build-up and Russia’s decision to hold talks with other major producers to discuss the market situation. Nitasha Shankar, vice president, research with YES Securities, told: “Indian markets have entered into a consolidation phase amidst low volumes. Bank, pharma and tech stocks are witnessing profit booking, while metal and auto stocks extend their gains.”
Sector-wise, metals, automobiles, and oil and gas witnessed healthy buying. However, information technology (IT), technology, entertainment and media (Teck), banking and fast moving consumer goods (FMCG) stocks came under intense selling pressure. The S&P BSE metal index zoomed by 199.71 points, automobile index augmented by 196.72 points and oil and gas index rose by 96.71 points. The S&P BSE IT index receded by 186.97 points, Teck index declined by 88.09 points, banking index fell by 19.71 points and FMCG index slipped by 7.77 points.