Global cues outweigh domestic cues; equity markets dragged lower

5 Dariya News

Mumbai 04-Nov-2016

Global uncertainty over the US presidential election -- four days away -- outweighed favourable decisions on Goods and Services Tax (GST) to drag the Indian equity markets lower on Friday.Both the key indices closed the day's trade in the red, as heavy selling pressure was witnessed in healthcare, metal and capital goods stocks.The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged down by 51.20 points or 0.60 per cent, to 8,433.75 points.The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 27,465.55 points, closed at 27,274.15 points -- down 156.13 points or 0.57 per cent, from its previous close at 27,430.28 points.The Sensex touched a high of 27,498.91 points and a low of 27,193.61 points during the intra-day trade.The BSE market breadth was skewed in favour of the bears -- with 2,224 declines and 681 advances.On Thursday, the benchmark indices were dragged by global cues. The barometer index had declined by 96.94 points or 0.35 per cent, while the NSE Nifty edged down by 29.05 points or 0.34 per cent.Initially on Friday, the key equity indices opened on a flat-to-negative note in sync with their global peers.Investor sentiment across the global markets remained subdued ahead of the upcoming US presidential elections.

Even the decision of the GST Council on Thursday -- which arrived at a consensus of four bands of tax between 5 per cent and 28 per cent, while agreeing to compensate states for losses on account of a shift to this new regime by way of cess -- could not cheer the equity markets.Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services, said: "The double whammy of penalty on Reliance and US anti-trust probe on pharma companies, led to a cascading effect on small and mid cap stocks, stubbing out what little hopes markets had from GST consensus."Moreover, global markets remained cautious ahead of the US non-farm payrolls data which is expected later in the evening.The data assumes significance as it will act as a gauge for the likelihood of a rate-hike by the US Fed in December.However, the Indian rupee appreciated by five paise to 66.70 against a US dollar from its previous close of 66.75 to a greenback.According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, the CNX Nifty traded with bearish sentiments tracking bearish global cues and selling pressure."IT stocks witnessed good recovery from lower levels in second half of the session while banking, Pharma, auto and Oil-gas stocks traded down on selling pressure," Desai said."Textile, aviation, media-entertainment and power stocks also traded with bearish sentiments. FMCG stocks witnessed firm opening but failed to sustain at higher levels and traded with mixed sentiments."

In terms of investments, provisional data with exchanges showed that the foreign institutional investors (FIIs) sold stocks worth Rs 343.30 crore, whereas the domestic institutional investors (DIIs) bought scrip worth Rs 556.90 crore.Sector-wise, the S&P BSE healthcare index plunged by 657.28 points, followed by the metal index, which declined by 253.40 points, and the capital goods index, which receded by 250.66 points.In contrast, the S&P BSE FMCG index surged by 117.96 points, the IT index rose by 64 points, and the technology, entertainment and media (Teck) index edged up by 16.87 points.Major Sensex gainers during Friday's trade were: ITC, up 3.64 per cent at Rs 249.10; Mahindra and Mahindra (M&M), up 1.02 per cent at Rs 1,372.45; Hindustan Unilever (HUL), up 0.91 per cent at Rs 847.40; Wipro, up 0.91 per cent at Rs 452.45; and ONGC, up 0.78 per cent at Rs 269.65.Major Sensex losers were: Sun Pharmaceuticals, down 7.41 per cent at Rs 652.75; DrReddy's Lab, down 5.67 per cent at Rs 3,077.20; Lupin, down 3.57 per cent at Rs 1,420.90; Coal India, down 3.44 per cent at Rs 315.50; and Hero MotoCorp, down 2.86 per cent at Rs 3,282.95.