Even though the Index of Industrial Production (IIP) numbers were in line with expectation, key Indian equity indices succumbed to profit-booking and snapped its five-day winning streak on Tuesday. Tracking positive cues from the global markets, Indian markets opened in higher but profit-booking coupled with weak cues from the European markets dragged the indices into the red.
The 30-share Sensex of Bombay Stock Exchange (BSE), after opening with a slight positive bias, traded in the negative for the entire trading session to end at 15,212.13 points, posting a loss of 291.79 points, or 1.88% on Tuesday. The wider S&P CNX Nifty of National Stock Exchange (NSE) closed at 4,552.25 points, losing 68.15 points, or 1.47%.
Industrial growth in June fell to 5.4% as against 8.9% in same period of the last year but inched up a bit compared to 4.1% in May. Growth in manufacturing sector, which accounts for over two-third of the IIP, fell drastically to 5.9 % from 9.7 % a year ago, which, experts believe, is matter of concern. The other constituents of the IIP were well within expectation, they added.
Alex Mathew, head of research, Geojit Financial Services Ltd, said, ?Markets ended lower on IIP data which was above the market expectation but not enthused by the market participants. The part of selling was from a section of players who believe that the Securities and Exchange Board of India (Sebi) may introduce stringent key norms for FIIs and may not address P-notes tomorrow. In the light of a long weekend holiday due to the Independence Day, traders were cutting down positions.?
According to provisional figures from the stock exchanges (SEs), foreign Institutional Investors (FIIs) were net sellers of Rs 687.19 crore while domestic institutional investors were net sellers of a marginal Rs 7.65 crore. The Sebi meet which is due on Wednesday is expected to deal with many issues with the foreign portfolio inflows and, according to media reports, it is very unlikely for the nodal agency to come to a conclusion on the very first meet regarding the P-note issue.
Profit-booking on Tuesday was more concentrated in heavyweights while the broader markets showed some resilience, witnessing some buying in the fast moving consumer goods (FMCG), sugar and fertilisers stocks. BSE’s mid-cap index closed the day at 5,953.53 points, losing 47.15 points, or 0.79%, while its small-cap index ended with a loss of 50.93 points, or 0.70%, to close at 7,220.42 points.
Weak manufacturing data dragged BSE’s metal index down by 475.51 points, or 3.62%, to end at 12,660.73 points while the interest rate sensitive Bankex lost 265.08 points, or 3.44%, to end the day at 7,437.27 points. The appreciation of the rupee against the greenback in the past few days brought the BSE IT and Teck index down by around 2.5% each.
Selling across the board led the overall breadth at BSE to remain in negative with 1,100 stocks advancing against 1,556 stocks that declined. As many as 73 stocks remained unchanged.