Weak Global cues dent Indian Equity Markets, BSE Sensex ends flat

Mumbai, Sep 21: Healthy foreign funds inflows, announcements on financial sector reforms and hopes of a rate cut did not arrest the slide in a barometer index which closed flat on the back of weak global cues on Monday.

The weak global cues emanated out of concerns on global growth, the health of the Chinese economy, and fears of rate hike by the US Fed. These cues subdued investor sentiments at the Indian equity markets.

The barometer 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE) previously gained 255 points or 0.98 percent at 26,218.91 points (on Friday, September 18).

A flat trajectory was also observed at the wider 50-scrip Nifty of the National Stock Exchange (NSE). It fell marginally by 4.80 points or 0.06 percent at 7,977.10 points.

The S&P BSE Sensex, which opened at 26,107.98 points, closed at 26,192.98 points — down 25.93 points or 0.10 percent from the previous day’s close at 26,218.91 points.

The Sensex touched a high of 26,233.46 points and a low of 25,972.54 points in the intra-day trade.

Market observers pointed out that weak global cues emanating out of the Asian markets impacted investor sentiments.

“The negative closing comes despite the fact that there was good buying in the banking and other financial services stocks. This happened due to the announcements about more operational autonomy which would be provided to the public sector banks,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.

“Due to the absence of any other major domestic trigger, the markets were solely focused on the international trends. The subdued Asian markets and the lower closing of the US markets on Friday impacted investors’ sentiments here.”

Among the Asian markets, Japan’s Nikkei dropped by 1.96 percent, Hong Kong’s Hang Seng fell by 0.75 percent. However, Shanghai Composite Index closed higher by 1.91 percent.

Other market watchers elaborated that the global growth concerns coupled with fears of a possible US interest rate hike in the latter part of 2015 played negatively on investors sentiments.

“The uncertainty related to the US Fed rate hike continues to worry investors coupled with growth concerns,” Vaibhav Agrawal, vice president, research, Angel Broking, told. “We expect the pressure to continue ahead of the F&O (futures and options) expiry this week.”

Gaurav Jain, director with Hem Securities, explained that the markets were able to close flat after paring initial losses due to increase in foreign funds’ inflows.

“After opening in negative terrain on account of global cues, indices recovered from the day’s lows fuelled by renewed buying interest by foreign portfolio investors (FPIs),” Jain said.

“Hopes of a rate cut by the RBI (Reserve Bank of India) kept the sentiment up on the street.”

The FPIs were net buyers in the cash market segment on Monday. They bought shares worth Rs.154.87 crore.

The domestic institutional investors (DIIs) were also net buyers. They bought shares worth Rs.415.09 crore in the capital markets segment.

The rupee also ended the day’s trade on a flat note. It closed at 65.72 to a US dollar, up 5 paise from its previous close of 65.67 to a greenback.

Sector-wise, banking, capital goods and automobile managed to stay afloat. However, fast moving consumer goods (FMCG), oil and gas and consumer durables stocks declined.

The S&P BSE banking index augmented by 160.26 points, capital goods index rose by 78.24 points and automobile index increased by 29.76 points.

The S&P BSE FMCG index receded by 57.52 points, oil and gas index declined by 24.01 points and consumer durables index was lower by 19 points.

Major Sensex gainers during Monday’s trade were: Hindalco Industries, up 2.43 percent at Rs.78; Axis Bank, up 2.05 percent at Rs.527.90; Maruti Suzuki, up 2.00 percent at Rs.4,491.85; State Bank of India (SBI), up 1.16 percent at Rs.245.15; and Gail, up 0.99 percent at Rs.290.50.

The major Sensex losers were: Reliance Industries, down 1.94 percent at Rs.877.70; Mahindra and Mahindra, down 1.43 percent at Rs.1,184.40; ITC, down 1.32 percent at Rs.314.30; Dr. Reddy’s Lab, down 1.11 percent at Rs.3,957.35; and Bharti Airtel, down 1.00 percent at Rs.352.60.