Global markets, caution ahead of state polls subdue equity indices

Mumbai: The key Indian equity indices closed on a flat note on Wednesday, as weak global cues along with investors anxiety ahead of state polls and a mixed macro-economic inflation data points offset gains from lower crude oil prices.

Sector-wise, heavy selling pressure was witnessed in export-oriented stocks like IT and healthcare owing to the appreciation in the domestic currency.

However, banking, oil and gas and FMCG stocks managed to end the session with gains.

Consequently, the S&P BSE Sensex fell 2.50 points or 0.01 per cent to 35,141.99. It had opened at 35,330.14 points from its previous close of 35,144.49 points.

It touched an intra-day high of 35,351.88 points and a low of 34,986.86 points.

The NSE Nifty50 closed 6.20 points lower or 0.06 per cent at 10,576.30 points.

“The market was volatile despite a fall in oil prices and appreciation in rupee as concerns about domestic liquidity and weak global cues overrode the sentiment,” said Geojit Financial Services’ Head of Research Vinod Nair.

The benchmark Brent crude prices slumped to $65.21 a barrel. India is a major importer of crude oil, and a steep fall in global prices eased concerns about inflation gaining pace in Asia’s third-largest economy.

“Oil prices fell to $65 per barrel and will ease concerns on current account deficit. IT and pharma indices witnessed selling pressure due to stronger rupee while stock specific buying on the basis of quarterly results and a decline in oil prices supported mid-caps to outperform,” Nair said.

The decline in crude prices sent the rupee higher. It closed at 72.31 to a US dollar from its previous close of 72.67.

On the other hand, official data showed that India’s annual rate of inflation based on wholesale prices rose to 5.28 per cent in October from 5.13 per cent in September.

The upcoming elections to constitute state legislatures in Madhya Pradesh, Rajasthan, Chhattisgarh, Telangana, and Mizoram fanned anxiety among investors. The state polls are scheduled for this month and the next.

According to HDFC Securities’ Retail Research Head Deepak Jasani: “After showing a bounce from the lows on Tuesday, Nifty shifted into a consolidation mode on Wednesday and closed the day on a negative note.”

“Major Asian markets closed mixed. Nikkei, Taiwan and Jakarta closed in the positive while Straits, Hang Seng, Kospi, SET and Shanghai have closed in the negative. European indices like FTSE 100, DAX and CAC 40 are all currently trading in the red.”

Investment-wise, provisional data with the exchanges showed that foreign institutional investors bought stocks worth Rs 277.38 crore on Wednesday while the domestic institutional investors sold scrips worth Rs 272.24 crore.

The top gainers on the Sensex were led by Maruti Suzuki, up 3.16 per cent at Rs 7,372.35; Hindustan Unilever, up 2.75 per cent at Rs 1,718.20; Asian Paints, up 2.73 per cent at Rs 1,319.90; ONGC, up 2.72 per cent at Rs 160.75; and State Bank of India, up 2 per cent at Rs 283.70 a share.

The laggards were Sun Pharma, down 7.36 per cent at Rs 520.35; Kotak Mahindra Bank, down 3.04 per cent at Rs 1,129.55; Tata Consultancy Services (TCS), down 2.85 per cent at Rs 1,880.55; Mahindra and Mahindra, down 2.62 per cent at Rs 770.40, and Infosys down 1.84 per cent at Rs 653.45 per share.