The five-day rally on the bourses came to an end as benchmark indices closed the day with minor losses in the wake of profit booking that emerged mid-session onwards. Key equity indices, after opening on a positive note, succumbed to weak cues from European markets and investor’s anticipation of one more spike in the inflation data which was due later in the day.
The 30-share Sensex, after climbing 1% intra-day, was dragged into negative zone as selling pressure persisted in bluechips, metal and information technology (IT) stocks. The Sensex finally managed to close at 14,777.01 points, posting a loss of 165.27 points or 1.11% while the broader National Stock Exchange (NSE) Nifty closed at 4,433.55 points, losing 43.25 points or 0.97%.
Bharat Shah, head, institutional sales, Ventura Securities, said, “Profit booking was expected but the major issue is the delay in monsoons and if it is prolonged, it will certainly have some implications on the markets. However, the overall trend is positive and even inflation is likely to settle down from here. The markets are likely to consolidate in the 16K zone.” The inflation measured by the wholesale price index, which was announced later in the day on Thursday, showed some signs of pinning down and the figures stood at 11.89% for the week ended July 12 as against 11.91% in the previous week. “With the inflation coming down, the Reserve bank of India, which is meeting for the monetary policy review next week, may take some dovish stance which would give some relief to the markets. The markets are anticipating a CRR and a repo hike of around 25bps,” added Shah.
The appreciating rupee against the US greenback on Thursday took its toll on IT stocks with India?s biggest software provider TCS leading the downslide. It fell by 6.45% to end the day at Rs 802.75 while Infosys slid by 2.38% to end at Rs1,565.60. Satyam computers fell by 2.21% to end at Rs 369.35.
On the derivatives segment of the NSE, some short positions were covered in the Nifty July futures contract leading the contract to end the day with a premium of around 11 points at 4,445 points. The rollovers for the current month contracts which is slated for expiry on July 31 started to pick up with the figures for Nifty rollovers standing at around 20%.
“In the sector, fresh short build-up was witnessed in the steel, IT and the telecom sectors while fertilisers stocks saw building-up of fresh long positions,” said a derivatives analyst at a leading broking firm.