Upcoming US employment data, coupled with negative sentiments emanating out of the Chennai floods depressed Indian equity markets and led a barometer index to shed 249 points on Friday.Initially, both the bellwether indices of the Indian equity markets opened on a negative note following weak Asian markets.Sentiments were depressed following flooding in Chennai that impacted automobile and information technology (IT) industries which are located there.Besides Chennai floods, the upcoming key US-based macro economic data -- the non-farm payrolls figures -- caused global volatility and impacted the Indian markets. Even the slow movement on getting key economic legislations passed during the ongoing winter session has had investors spooked.
The barometer 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE) closed 249 points or 0.96 percent down.Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) ended the day's trade in the red. It closed lower by 82.25 points or 1.05 percent at 7,781.90 points.The Sensex of the BSE, which opened at 25,810.06 points, closed at 25,638.11 points, down 248.51 points or 0.96 percent from the previous day's close at 25,886.62 points.The Sensex touched a high of 25,810.06 points and a low of 25,623.71 points during the intra-day trade.On Thursday, the Sensex of the BSE closed 231.23 points, or 0.89 percent down following heightened chances of a US rate hike and the lower-than-expected stimulus package from the European Central Bank (ECB) through its bond buying program.The ECB cut its deposit rate by 10 basis points against markets' expectation of a 20 basis points reduction.
In addition, the ECB extended its bond-buying program till at least March-17 2016. However, it did not increase the limits of the stimulus measure.Analysts elaborated that the markets ended the day's trade in the red after Thursday's comments made by US Federal Reserve (US Fed) chairperson Janet Yellen which heightened the chances of a US rate hike in mid-December.A US rate hike could potentially lead to massive amounts of pull-back of foreign funds from emerging economies like India. "Thursday's comments' by US Fed chairperson Yallen and the upcoming US jobs data caused uncertainty and made investors' reluctant to chase prices," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
"The flooding in Chennai has also had a negative impact on sentiments due to the presence of large automobile and IT clusters' in the area whose operations were disturbed due to the flooding." Nitasha Shankar, vice president for research with YES Securities, said: "Indian markets extended its correction closing lower for the third consecutive day in a row confirming the weakness.""All major sectors barring the pharma sector ended in the red. Market breadth continued to favour the bears throughout the day with 1,186 advances and 1,560 declines."Sector-wise during the day's trade, healthcare and metal indices made modest gains, while banking, automobile and consumer durables indices came under selling pressure.
The S&P BSE healthcare index gained by 68.90 points and metal index inched-up by 6.12 points.The S&P BSE banking index receded by 213.38 points, automobile index declined by 207.96 points and consumer durables index decreased by 115.45 points.Furthermore, the Indian rupee came in for a beating after Yellen's comments which heightened the chances of a US rate hike in mid-December, it fell to its lowest levels in more than two years.The Indian rupee fell in early trade to touch 67.01 to a US dollar against its previous close of 66.66 to a greenback. However, it later recovered and closed the day's trade at 66.69-70 to a US dollar.
The foreign institutional investors (FIIs) were net sellers in the day's trade at stock exchanges, whereas the domestic institutional investors (DIIs) were net buyers. According to data with stock exchanges, the FIIs sold stocks worth Rs.1,745.73 crore, while the DIIs bought stocks worth Rs.1,069.01 crore.Major Sensex gainers during Friday's trade were Sun Pharma, up 4.02 percent at Rs.756.10; Bharti Airtel, up 0.48 percent at Rs.321.25; Coal India, up 0.16 percent at Rs.335.05 and Tata Steel, up 0.02 percent at Rs.240.20.The major Sensex losers were HDFC, down 2.42 percent at Rs.1,171.95; Mahindra and Mahindra (M&M), down 2.42 percent at Rs.1,316; NTPC, down 2.28 percent at Rs.130.80; ITC, down 2.19 percent at Rs.335.60 and ICICI Bank, down 1.71 percent at Rs.261.45.