Key indices edge lower in directionless trading
Sensex, Nifty reverse early gains in volatile trade as selling in IT, metal, FMCG, media stocks and weak global cues weigh on investor sentiment
image for illustrative purpose
Mumbai: Market benchmarks racked up losses for the second straight session on Tuesday, in tandem with a lacklustre trend in global equities as worries about economic recovery and inflation kept sentiment subdued. A weak rupee and persistent foreign fund outflows further weighed on the bourses, traders said.
The 30-share BSE Sensex opened higher, but could not carry forward the momentum in see-saw trade. It finally closed 236 points or 0.43 per cent lower at 54,052.61. On similar lines, the broader NSE Nifty dropped 89.55 points or 0.55 per cent to end at 16,125.15.
"Anxiety of slowing economy and rising interest rates underpinned by soaring inflation continued to haunt the global market. The UK and Eurozone composite PMI registered the slowest rise in business activity in the month of May, worsening global investor risk sentiment. On the domestic front, while all major sectors succumbed to the pressure, the auto sector bucked the market trend this month gaining on fuel price cut and rise in steel custom duty," said Vinod Nair, head (research) at Geojit Financial Services.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, said: "The cautious optimism seen in early trades failed to generate healthy gains as weakness in other Asian peers and pessimism in European gauges triggered last hour selling. Investors are waiting for the minutes of the US FOMC meeting, which will provide cues on the central bank's rate-hike direction going ahead. Also, there is a lot of skepticism amongst investors over interest rate hikes in the near term and its impact on growth going ahead."
Continuing their selling spree, foreign institutional investors (FIIs) offloaded shares worth a net Rs 1,951.17 crore on Monday, as per stock exchange data.
In the broader market, the BSE smallcap gauge declined 1.14 per cent while the midcap index dipped 0.85 per cent. Among BSE sectoral indices, IT tanked 1.75 per cent, followed by utilities (1.70 per cent), teck (1.64 per cent) and power (1.64 per cent). Finance and bank ended with marginal gains.
