Despite renewed FII buying, mkts settle in red

Mumbai Snapping their two-day winning run, equity benchmarks Sensex and Nifty closed in the negative territory on Thursday, tracking losses in index majors Reliance Industries, ITC and HDFC bank amid a weak trend in global markets.

The 30-share BSE Sensex declined 388.40 points or 0.59 per cent to settle at 65,151.02. During the day, it fell by 493.32 points or 0.75 per cent to 65,046.10. The NSE Nifty slipped 99.75 points or 0.51 per cent to end at 19,365.25.

“The mounting influence of weak global cues hindered the domestic market’s ability to recoup, resulting in sustained selling pressure. The release of Fed minutes unveiled a divided stance among its members regarding the necessity of additional rate hikes, contrasting the previously anticipated rate pause,” said Vinod Nair, head (research) at Geojit Financial Services. “As per a study by Goldman Sachs, overseas investors holding in midcaps in India has increased by 175 basis points to 16 per cent of their market capitalisation this year, compared with a drop of 250 basis points over the last five years,” said Deepak Jasani, head (retail research), HDFC Securities.

“Profit-taking came to the fore amid weak global cues, as rising US bond yields and fall in the currency levels weighed on the equity market sentiment. Investors are also worried about further rate hikes coupled with deflation and slowing demand in China, which has been prompting investors to flee equity markets amid choppy trends,” said Shrikant Chouhan, head (research-retail), Kotak Securities Ltd.

“Global stocks were mostly lower on Thursday after notes from a US Federal Reserve meeting dented hopes interest rate hikes are finished. Fears over China’s sluggish economic recovery did not help matters either,” Jasani said.