A benchmark index of Indian equities markets, the 30-scrip Sensitive Index (Sensex), recovered from a steep fall in the early trading session and closed flat on Thursday.It closed the day's trade down 45 points or 0.17 percent. The Sensex had fallen by 302.48 points in the early part of the day's trade.The wider 50-scrip Nifty of the National Stock Exchange (NSE) also closed the day's trade in the red. But it was down only 11.25 points or 0.14 percent at 8,224.20 points.The Sensex of the S&P Bombay Stock Exchange (BSE), which opened at 27,290.17 points, closed the day's trade at 27,206.06 points, down 45.04 points or 0.17 percent from the previous day's close at 27,251.10 points.The Sensex touched a high of 27,293.99 points and a low of 26,948.62 points in the intra-day trade. In Thursday's trade, healthy buying was observed in automobile, oil and gas, metal, bank and fast moving consumer goods (FMCG) stocks. However, information technology (IT), consumer durables, capital goods, healthcare and technology, entertainment and media (TECK) sectors came under selling pressure.According to the analysts tracking the day's trade, markets opened with a marginal uptick and later witnessed heavy sell-off. Weak US retail sales data kept the dollar under check and helped the Indian rupee.
The markets were impacted by a number of factors, some of them being negative international cues, outflow of foreign funds due to a tax issue, weakening rupee, stalemate in parliament over crucial bills like land acquisition and goods and services tax (GST), and disappointing quarterly results.However, the official data on the annual rate of wholesale price inflation (WPI) which decelerated further to its lowest in six months helped in calming nerves on the market.The WPI stood at (-)2.65 percent for April from (-)2.33 percent for the month before, this data should provide more room for the Reserve Bank of India (RBI) to ease its monetary policy stance."As far as domestic factor is concerned in the near-term, risk is to understand the extent of further earnings downgrade. FY16 earnings continued to be high at more than 20 percent," said Vinod Nair, head for fundamental research with Geojit BNP Paribas Financial Services. "The government's spend is likely to increase in the medium-term. India's economy will be better in the medium-term led by real incomes and higher government spending. Hence the big question is timing which is always 'never know', thus we recommend to be structurally positive from a wait-and-watch strategy."
Nair observed that the latest CPI (consumer price index) trajectory provided a scope to cut rate by the next RBI (Reserve Bank of India) meet on June 2. "Maybe the point to ponder over is a 25 basis points (bps) or 50 bps cut. This is likely to provide a support to the range-bound correction led by FIIs (Foreign Institutional Investors) on global volatility," Nair added.The S&P BSE automobile index augmented by 158.97 points, followed by oil and gas index which gained by 94.53 points, metal index increased by 75.09 points, bank index was higher by 54.45 points and FMCG index was up by 18.66 points.
The S&P BSE IT index receded by 75.35 points, consumer durables index lost 41.97 points, capital goods index declined by 28.02 points, healthcare index fell by 24.45 points and TECK index was down by 19.64 points. The major Sensex gainers on Thursday were: Hindalco Inds, up 2.92 percent at Rs.137.40; State Bank of India (SBI), up 2.37 percent at Rs.280.65; Bajaj Auto, up 1.87 percent at Rs.2,165; Mahindra and Mahindra (M&M), up 1.71 percent at Rs.1,226.05; and Tata Steel, up 1.70 percent at Rs.365.65.
The losers were: Vedanta, down 1.65 percent at Rs.214.30; Sun Pharma, down 1.12 percent at Rs.944.70; Infosys, down 1.09 percent at Rs.1,934.55; Wipro, down 1.04 percent at Rs.536.50; and HDFC, down 0.92 percent at Rs.1,208.30.Among the Asian markets, Japan's Nikkei was lower by 0.98 percent, while China's Shanghai Composite Index moved up by 0.07 percent and Hong Kong's Hang Seng was higher by 0.14 percent.In Europe, London's FTSE 100 was marginally down by 0.09 percent. France's CAC 40 was slightly higher by 0.03 percent and Germany's DAX Index gained 0.13 percent at the closing in the Indian markets.