Inflation, global cues depress equity indices; metal stocks slump
Mumbai, July 16 : Rise in wholesale inflation rate and broadly weak global cues subdued the key Indian equity indices on Monday, with the Nifty50 on the National Stock Exchange (NSE) closing below the 11,000-mark.
According to market observers, heavy selling pressure was witnessed on the metal, healthcare and auto stocks.
Index-wise, the broader NSE Nifty50 closed at 10,936.85 points -- lower by 82.05 points or 0.74 per cent from its previous close of 11,018.90 points.
The barometer 30-scrip Sensex on the BSE, which had opened at 36,658.71 points, closed at 36,323.77 points -- down 217.86 points or 0.60 per cent -- from its previous close of 36,541.63 points.
The bearish momentum on the Sensex could be gauged from the fact that its intra-day high was its opening level of 36,658.71 points. It touched a low of 36,298.94 points during the day.
"Surge in inflation and weak global cues influenced investors to book profit from the recent rally while IT index maintained the uptrend followed by earnings," said Vinod Nair, Head of Research at Geojit Financial Services.
The wholesale inflation rate for June was recorded at 5.77 per cent, compared to 4.43 per cent in the previous month, according to data released on Monday.
Abhijeet Dey, BNP Paribas Mutual Fund's Senior Fund Manager for Equities, said: "A higher inflation rate in a flat-to-slowing growth environment can be detrimental for the economy."
Major Asian markets closed on a negative note and the European indices like FTSE 100 and CAC 40 traded in the red, said Deepak Jasani, Head of Retail Research at HDFC Securities.
Nair also said the trade tensions and weak rupee negatively impacted the performance of broad indices.
In the broader markets, the S&P BSE mid-cap and the S&P BSE small-cap declined significantly, by 2.45 per cent and 2.51 per cent respectively. The BSE market breadth was bearish with 2,052 declines and 546 advances.
On the currency front, the rupee weakened by five paise to end at 68.58 per dollar, against the previous close of 68.53 per greenback.
Investment-wise, provisional data with exchanges showed that foreign institutional investors sold scrip worth Rs 625.68 crore and the domestic institutional investors sold stocks worth Rs 70.30 crore.
Sector-wise, the gainers were the S&P BSE IT index and the teck (technology, entertainment and media) stocks which rose by 112.89 points and 23.91 respectively.
On the contrary, the S&P BSE metal index plunged 461.08 points, the healthcare index was down 458.49 points and the auto index ended 402.05 points lower from its previous close.
The major gainers on the Sensex were NTPC, up 1.96 per cent at Rs 155.70; Infosys, up 1.83 per cent at Rs 1,333.05; HDFC, up 0.95 per cent at Rs 1,991.55; Wipro, up 0.86 per cent at Rs 283.10; and Hindustan Unilever, up 0.73 per cent at Rs 1,753.85 per share.
The top losers were Tata Steel, down 6.96 per cent at Rs 519.30; Tata Motors (DVR), down 5.02 per cent at Rs 142.75; Tata Motors, down 4.77 per cent at Rs 251.55; Sun Pharma, down 4.69 per cent at Rs 532.95; and Bharti Airtel, down 3.31 per cent at Rs 346.20 per share.
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Rupee hits all-time low for second time in a week
Mumbai (PTI): The rupee depreciated 31 paise to settle at 91.99 against the US dollar on Wednesday, touching the lowest closing level for the second time in less than a week, amid increased month-end demand for the greenback.
Forex traders said the rupee opened higher as the US dollar index softened and a long-awaited trade breakthrough with Europe offered quiet reassurance. However, increased month-end demand for the American currency as well as the ongoing geopolitical tensions dented investors' sentiments.
At the interbank foreign exchange, the rupee opened at 91.60 and touched an early high of 91.50, but pared all the gains to touch an intra-day low of 91.99 against the greenback.
The domestic unit settled 31 paise down, revisiting its lowest-ever closing level of 91.99 against the greenback. The Indian currency previously ended at this level on January 23 when it also hit its all-time intraday low of 92 against the US dollar.
On Tuesday, the rupee rebounded from its all-time low levels and gained 22 paise to close at 91.68 against the US dollar.
Analysts said the rupee opened higher as the US dollar index softened and a long-awaited trade breakthrough with Europe bolstered investor sentiment.
India and the European Union on Tuesday announced the conclusion of negotiations for the free trade agreement (FTA), under which a number of domestic sectors such as apparel, chemicals and footwear will get duty-free entry into the 27-nation bloc, while the EU will get access to the Indian market at concessional duty for cars and wines, an official said.
The deal has been dubbed the "mother of all deals" as it will create a market of about 2 billion people.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.07 per cent lower at 96.14.
Brent crude, the global oil benchmark, was trading 0.43 per cent lower at USD 67.28 per barrel in futures trade.
On the domestic equity market front, Sensex jumped 487.20 points to settle at 82,344.68, while Nifty surged 167.35 points to 25,342.75.
Foreign Institutional Investors turned net buyers and purchased equities worth Rs 480.26 crore on Wednesday, according to exchange data.
