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Disappointing macro-data, global concerns dent equity markets

By Porisma Pompi Gogoi

Mumbai, June 18 (IANS) Disappointing macro-economic data, coupled with negative global cues and profit booking, dented the Indian equity markets during the just concluded weekly trade.

But announcements on some major economic policy initiatives and debt recast plans reversed the downtrend and aided the key indices to end on a flat-to-positive note.

The 51-scrip Nifty of the National Stock Exchange (NSE) inched up by 0.15 points at 8,170.20 points, while the 30-scrip sensitive index (Sensex) of the BSE was up a mere 18.1 points or 0.07 per cent at 26,653.85 points.

The benchmark indices started on a weak note as investors turned cautious ahead of monetary policy decisions from the US Federal Open Market Committee (FOMC), the Bank of Japan (BoJ) and the Bank of England (BoE).

Besides, lower crude oil prices and no further stimulus by the BoJ dampened sentiments.

On the domestic front, disappointing macro-economic inflation and trade data points added to the investors' depression.

The Consumer Price Index (CPI), as well as the Wholesale Price Index (WPI), showed upward movements, whereas India's exports plunged for the 18th-straight month.

The equity markets were also spooked by the initial shortfall in monsoon rains.

However, the markets were lifted during the later part of the week as value buying buoyed global indices and the rupee appreciated.

In addition, the government's decisions on the civil aviation and banking sectors and the debt recast gave a mildly positive fillip to the key indices.

Apart from that, short covering and increased chances of parliament passing the GST (Goods and Services Tax) Bill during the July-August monsoon session also supported prices.

"Indian markets terminated a volatile trading week on a flat note. The benchmark indices traded in a range throughout the week," Nitasha Shankar, Senior Vice President for Research with YES Securities, told IANS.

"Active participation continued in the broader markets, which outperformed the headline indices."

In terms of broader markets, the smallcap index ended with a gain of one per cent, while midcap index ended marginally higher.

“The Bank of Japan and the US Federal Reserve decided to keep interest rates unchanged which marred sentiments,” said Vaibhav Agrawal, Vice President and Research Head at Angel Broking.

“The domestic data showing rise in wholesale and consumer price inflation offset reports indicating sooner than expected implementation of the Goods and Services Tax, the biggest tax reform.”

Among the sector-specific indices of the BSE, the realty index was up 3.51 per cent, and the telecom index was up 1.13 per cent. On the other hand, the healthcare index was down 0.78 per cent and the capital goods index was down 0.44 per cent.

Among the individual stocks of the Sensex, Bharti Airtel was the top gainer with 3.03 per cent, followed by Tata Motors (up 2.21 per cent), HDFC (up 2.19 per cent), Tata Motors (D) (up 2.06 per cent) and Coal India (up 1.84 per cent).

The losers were led by Tata Power (down 3.41 per cent), followed by Bharti Infratel (down 2.74 per cent), Tata Steel (down 1.53 per cent), Sun Pharmaceuticals (down 1.51 per cent) and Dr. Reddy's Lab (down 2.43 per cent).

The week also saw an outflow of funds due to global concerns. As per provisional figures from the stock exchanges, the foreign institutional investors divested stocks worth Rs 134.14 crore during the week under review, while domestic institutional investors sold scrip worth Rs 585.21 crore.

In contrast, figures from the National Securities Depository (NSDL) showed that foreign portfolio investors were net buyers of equities worth Rs 921.69 crore, or $137.68 million from June 13-17.

(Porisma Pompi Gogoi can be contacted at porisma.g@ians.in)

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