Disappointing quarterly results coupled with uncertainty over Bihar assembly elections and anxiety surrounding a US rate hike dampened Indian equity markets on Wednesday.
Both the bellwether indices of the Indian equity markets closed flat after making initial gains in sync with their Asian peers.
Positive Chinese macro economic data and enthusiastic response to Japan Post’s initial public offering (IPO) buoyed the Asian markets elsewhere.
Furthermore, the domestic macro data — Nikkei India composite PMI (purchasing managers’ index) which showed a rise in overall economic activity during October — supported the upward trend.
However, both the bellwether indices ceded their initial gains on the back of profit bookings and investors’ reluctance to chase higher prices.
On Wednesday, the wider 50-scrip Nifty of the National Stock Exchange (NSE) closed flat. It was lower by 20.50 points or 0.25 percent at 8,040.20 points.
The barometer 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE) closed marginally in the red.
After opening at 26,704.02 points, it ended the day at 26,552.92 points — down 37.67 points or 0.14 percent from the previous day’s close at 26,590.59 points.
The Sensex touched a high of 26,800.06 points and a low of 26,510.31 points in the intra-day trade.
Market observers cited disappointing quarterly results and anxiety over Bihar election outcome as the reasons for the subdued trading.
Even the upcoming US jobs data which will give crucial insight into whether or not the US Fed will raise interest rates flared volatility.
“Investors were reluctant to chase prices, ahead of the crucial jobs data in the US and disappointing quarterly results,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
The US jobs data, to be released on Friday, is expected to give cues on whether the US Fed will raise interest rates or not in its December meeting.
The US Fed is slated to conduct its Federal Open Market Committee (FOMC) during December.
The FOMC assumes significance as higher interest rates in the US are expected to lead away FPIs (Foreign Portfolio Investors) from emerging markets such as India.
Gaurav Jain, director with Hem Securities said: “Last half hour of selling pressure dragged indices sharply lower, as investors seemed worried of NDA (National Democratic Alliance) losing crucial Bihar election which can adversely affect the reform process.”
The investors were seen to avoid taking long position ahead of the Bihar election verdict which is due on November 8.
The foreign institutional investors (FIIs) were net buyers in the day’s trade, whereas the domestic institutional investors (DIIs) were net sellers.
According to data with stock exchanges, the FIIs bought stocks worth Rs.33.16 crore, while the DIIs off-loaded stocks worth Rs.74.9 crore.
Nitasha Shankar, vice president, research, with YES Securities, told IANS: “Market breadth turned in favour of the ‘Bears’ in second half with 1,255 advances and 1,469 declines.”
“Select banks continued to remain under pressure. Auto and public sector undertakings (PSU) bank stocks outperformed, while pharma, energy and IT (information technology) stocks witnessed selling pressure,” she said.
Sector-wise, S&P BSE healthcare index plunged by 142.46 points, banking index receded by 95.26 points and IT index plummetted by 65.07 points.
On the other hand, the S&P BSE automobile index surged by 306.86 points, metal index gained by 29.24 points and fast moving consumer goods (FMCG) index rose by 22.57 points.
Major Sensex gainers during Wednesday’s trade were Tata Motors, up 6.02 percent at Rs.405.05; Mahindra and Mahindra (M&M), up 1.71 percent at Rs.1,253.90; Coal India, up 1.40 percent at Rs.330.25; Hero MotoCorp, up 1.19 percent at Rs.2,614.40; and Bajaj Auto, up 1.13 percent at Rs.2,448.75.
The major Sensex losers were ICICI Bank, down 2.06 percent at Rs.273.40; Gail, down 1.92 percent at Rs.301.55; Sun Pharma, down 1.84 percent at Rs.852.35; Reliance Industries, down 1.48 percent at Rs.952.10; and Lupin, down 0.76 percent at Rs.1,859.35.