Mumbai, April 5 (IANS) Negative global cues and profit booking plunged the Indian equity markets on Tuesday.
In the process, both the key indices of the Indian equity markets receded deep into the red during the late-afternoon trade session.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) traded lower by 136.20 points or 1.76 percent, to 7,622.60 points.
The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 25,372.44 points, traded at 24,949.78 points (at 2.15 p.m.) -- down 450 points or 1.77 percent from the previous close at 25,399.65 points.
The Sensex touched a high of 25,372.44 points and a low of 24,917.28 points during the intra-day trade.
The BSE market breadth favoured the bears -- with 1,683 declines and 711 advances.
In contrast, the barometer index had closed in the positive territory on Monday. It had ended Monday's trade with a gain of 130.01 points or 0.51 percent, while the Nifty inched up 46 points or 0.59 percent.
Initially, on Tuesday, both the key indices of the Indian equity markets opened on a negative note in-sync with most of their Asian peers. The lower close of the US markets on Monday, too, dipped the Indian indices initially.
Investors seem to have discounted a 25 basis points cut in key lending rates by the Reserve Bank of India (RBI). The rate cut was announced during RBI's first bi-monthly monetary policy review for 2016-17.
Market analysts stated that investors' expected a larger rate cut, than the 25 basis points cut.
Besides, the FOMC (Federal Open Market Committee) minutes expected to be released on Wednesday and the start of the fourth quarter (Q4) results season deterred investors from chasing prices.
The FOMC minutes assumes significance -- as they can give vital cues to a likely US rate hike. A hike in the US interest rates is expected to lead away Foreign Portfolio Investors (FPIs) from emerging markets such as India.
In addition, weak crude oil prices due to supply side issues dented sentiments.
"Despite a rate cut by the RBI, global cues weighed heavy on the Indian markets. Profit booking, negative Asian indices, except for those in China and weak crude oil prices dented sentiments," Anand James, chief market strategist, Geojit BNP Paribas Financial Services, told IANS.
"Cash market volumes, as well as FIIs (foreign institutional investors) buying had also been easing for the last few days, in contrast to a bright March month."
According to James, to some extent, the lack of volumes could be attributed to the cloud that has fell on high frequency trading after SEBI's technical advisory committee recommended action on the basis of media reports of unfair access to market data.
Nitasha Shankar, senior vice president for research with YES Securities informed that the Indian markets extended their morning losses, following a cut in the repo rate by the RBI.
"Banks index was under pressure and traded down with cuts of two percent. PSU banks was down three percent and witnessed intense selling pressure that dragged the entire bank index lower," Shankar noted.
"Broader markets also traded on a weak note in line with the headline indices led by profit booking. All sectorial indices traded in the red. Maximum cuts were seen in bank, reality, media, auto and metal indices."
