Mumbai, Sep 14 (IANS) Indian equity markets closed on a flat note on Wednesday, as negative global cues, foreign funds outflow, disappointing macro-data and profit booking dented investors' sentiments.
However, both the key indices managed to end the day's trade marginally in the green, as value buying at lower levels and short covering aided in the recovery.
The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged up by 11 points or 0.13 per cent to 8,726.60 points.
The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 28,345.49 points, closed at 28,372.23 points -- up 18.69 points or 0.07 per cent from its previous close at 28,353.54 points.
The Sensex touched a high of 28,416.41 points and a low of 28,259.38 points during the intra-day trade.
In contrast, the BSE market breadth was tilted in favour of the bulls -- with 1,749 advances and 970 declines.
On the previous trading session on Monday, both the key Indian indices were dragged lower by increased possibility of a US rate hike, coupled with profit-booking and outflow of foreign funds.
The barometer index had plunged by 443.71 points or 1.54 per cent, while the NSE Nifty dipped by 151.10 points or 1.70 per cent.
The Indian equity markets were closed on Tuesday on account of Eid-ul-Zuha.
Initially on Wednesday, the benchmark indices opened on a flat note, following negative Asian markets.
Global and domestic markets receded on the back of increased possibility of a US rate hike.
Investors' confidence was eroded after cues from the US Federal Reserve indicated increased possibility of a rate hike. The Fed's FOMC (Federal Open Market Committee) will meet on September 20-21.
A hike in US interest rates can potentially lead FPIs (Foreign Portfolio Investors) away from emerging markets such as India.
It is also expected to dent business margins as access to capital from the US will become expensive.
Besides, disappointing macro-economic data -- the Wholesale Price Index (WPI) for August and the Index of Industrial Production (IIP) for July -- dented investors' sentiments.
Provisional data released during the day showed that the annual rate of inflation based on wholesale prices (WPI) moved up to 3.74 per cent in August.
The factory output data which was released on Monday showed a negative growth of (-)2.4 per cent in July.
Nevertheless, expectations of a interest rate cut by the Reserve Bank of India (RBI) on the back of lower Consumer Price Index (CPI) data for August, rupee appreciation, value buying and short covering helped the key indices to pare their losses.
The CPI data released after market hours on Monday showed that the annual retail inflation had eased by 100 basis points to 5.05 per cent in August.
In addition, the rupee strengthened by two paise to 66.90 against a US dollar from its previous close of 66.92 to a greenback on Monday.
"Short covering in last hour of trade led benchmark indices marginally higher to close at the high point of the day," said Nitasha Shankar, Senior Vice President for Research with YES Securities.
"Broader markets outperformed the benchmark indices as stock specific buying recommenced. The midcap index ended higher by 1.22 per cent and the smallcap index ended higher by 1.80 per cent."
According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, lower USD/INR futures prices in second half of the session supported the recovery.
"CNX Nifty traded with sideways sentiments throughout the session on some short covering at lower levels from traders. IT stocks traded volatile and faced profit booking at higher levels due to correction in USD/INR futures prices," Desai said.
"Banking, pharma and auto stocks managed to hold on to early gains on support of short covering and value buying at lower levels. Oil-gas and FMCG stocks traded with mixed sentiments, while aviation stocks also traded with mixed sentiments tracking sideways crude oil prices."
In terms of investments, provisional data with the exchanges showed that the foreign institutional investors (FIIs) sold stocks worth Rs 477.33 crore, whereas the domestic institutional investors (DIIs) divested scrip worth Rs 8.53 crore.
Sector-wise, the S&P BSE banking index surged by 175.71 points, followed by the consumer durables index, which edged up 140.66 points, and the automobile index rose by 126.33 points.
On the other hand, the S&P BSE IT index declined by 69.40 points, the technology, entertainment and media (TECK) index edged down by 23.08 points, and the energy index fell by 1.03 points.
Major Sensex gainers during Wednesday's trade were: Adani Ports, up 2.06 per cent at Rs 264.95; State Bank of India (SBI), up 1.94 per cent at Rs 257.60; Hero MotoCorp, up 1.71 per cent at Rs 3,589.50; Axis Bank, up 1.71 per cent at Rs 602.30, and NTPC, up 1.53 per cent at Rs 155.45.
Major Sensex losers were: Coal India, down 1.97 per cent at Rs 324.20; Tata Consultancy Services (TCS), down 1.29 per cent at Rs 2,328.55; ONGC, down 1.15 per cent at Rs 248.25; Hindustan Unilever (HUL), down 1.06 per cent at Rs 908.60; and Mahindra and Mahindra (M&M), down 0.91 per cent at Rs 1,412.95.
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