Negative global trends, coupled with the upcoming third-quarter results and macro-economic data, depressed Indian equity markets on Monday.This resulted in the barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) to close the day's choppy trade session at a new 19-month low.Both the bellwether indices of the Indian equity markets touched their new 52-week lows during the intra-day trade.Initially, both the indices opened on a negative note in sync with their Asian peers, and last week's massive falls.During the day's trade, Asian markets remained deep in the red after Chinese stocks receded by more than five percent.A weak closing of the US markets on Friday due to falling crude prices also eroded investors' confidence.
However, the bellwether indices pared their losses, as investors were attracted by a sizeable number of stocks that were trading at their yearly lows.Apart from value buying, short covering amidst thin volumes led the morning relief rally.
In addition, investors were hopeful for a better third quarter (Q3) results by India Inc. on the back of an economic recovery and low commodity prices.
The Q3 earnings results will start coming in from Tuesday.However, the gains were soon capped by the long-liquidation positions and Friday's US-based data which showed a strengthening jobs market. The data hinted at a potential future rate hike. Another rate hike by the US Fed will lead more FPIs (foreign portfolio investors) away from emerging economies such as India, further denting the equity and currency markets.Besides, caution prevailed over the upcoming domestic macro-data on industrial output, and retail inflation. Both the data points are slated to be released on Tuesday.The choppy trade session again led to value buying and short covering which pushed prices. A rebound seen in European markets soothed investors' nerves. But gains were soon ceded due to prevailing negative bias.
The volatility finally led barometer S&P BSE Sensex to close 109 points, or 0.44 percent, down.Similarly, the wider NSE Nifty ended the day's trade in the red. It was lower by 38 points, or 0.49 percent, at 7,563.85 points.The Nifty volatility index (India VIX) closed at 18.69, up around 5.01 percent.The Sensex of the S&P BSE, which opened at 24,787.11 points, closed at 24,825.04 points -- down 109.29 points, or 0.44 percent from the previous day's close at 24,934.33 points.The Sensex touched a high of 24,961.88 points and a low of 24,598.90 points -- its new 52-week low during the intra-day trade.The S&P BSE market breadth favoured the bears -- with 1,581 declines and 1,225 advances.The Sensex closed the previous week's session on January 8 with a staggering cumulative fall of 1,226.57 points or 4.68 percent, while the Nifty was lower by 361.85 points or 4.54 percent."The slide in the Chinese markets, last week's falls and some profit bookings made on Friday's relief rally capped the gains," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
"Investors were seen reluctant to chase prices higher due to the upcoming inflation data and prevailing global uncertainties."Nitasha Shankar, vice president for research with YES Securities, elaborated that broader markets underperformed the headline indices as high beta stocks continued to witness profit booking. "Market breadth favoured the bears throughout the day, ending with 1,565 declines and 1,228 advances," Shankar noted."Bank, pharma and IT (information technology) indices prolonged their weakness, ending lower in excess of 1.5 percent a piece." Sector-wise, healthcare, banking and information technology (IT) indices came under selling pressure.The S&P BSE healthcare index plunged by 222.88 points, banking index gained by 144.20 points and IT index closed lower by 118.98 points.On the other hand, energy index gained by 18.22 points, automobile index rose 17.95 points and utilities index inched-up by 4.57 points.
The foreign institutional investors (FIIs) were net sellers during the day's trade, while domestic institutional investors (DIIs) were net buyers.According to data with stock exchanges, FIIs divested Rs.1,319.24 crore, while DIIs bought stocks worth Rs.900.99 crore.Apart from equities, the rupee, too, got battered during the day's trade. It weakened by 17 paise to close at 66.81 to a US dollar from its previous close of 66.64 to a greenback. Major Sensex gainers during Monday's trade were Reliance Industries, up 2.69 percent at Rs.1,051.55; Tata Motors, up 2.04 percent at Rs.360.65; Maruti Suzuki, up 1.51 percent at Rs.4,279.45; NTPC, up 1.47 percent at Rs.141.65; and ITC, up 0.85 percent at Rs.316.Major Sensex losers during day's trade were Wipro, down 3.27 percent at Rs.537.80; Adani Ports, down 3.13 percent at Rs.234; Mahindra and Mahindra (M&M), down 2.77 percent at Rs.1,163.60; BHEL, down 2.57 percent at Rs.149.75; and Dr.Reddy's Lab, down 2.26 percent at Rs.2,942.50.