Equity markets on Thursday continued their decline for the third consecutive session on the back of a weak global sentiment.
Experts said equity markets may remain weak in the near term given the twin concerns that the RBI may hike the repo rate next week while the US Fed may taper its bond-buying programme.
Driven by such fears, the S&P BSE Sensex lost 245.80 points or 1.16% to close below 21000 at 20925.61, while the CNX Nifty slipped 70.85 points to close at 6237.05.
Markets opened weaker in line with negative cues from other Asian markets and overnight weak trading in the US markets, and saw very little buying from foreign investors.
The foreign institutional investors (FIIs) were net buyers of equities worth just Rs 187.81 crore even as domestic institutional investors (DIIs) continued to remain net sellers, dumping equities worth Rs 355 crore.
All the sectoral indices listed on BSE barring the power index ended in the red with auto and banking sectors falling the most by 2.2% and 1.42% respectively.
Expectations during trading hours that factory output and retail inflation data would come in negative after market hours, too, weighed on the stocks, bonds and the rupee.
The rupee on Thursday fell by 58 paise or 0.95% to close at 61.83 per dollar while the 10-year government bond yields went up by 2 basis points (bps) to close at 8.85%. The government bond yields have now surged 16 bps in the last 11 sessions.
Weak economic data on Thursday is likely to deepen pain as interest rate-sensitive stocks may see a knee-jerk selling on Dalal Street today.
Deven Choksey, MD of KR Choksey Securities, believes that while markets have more or less discounted the weak economic data, the market may continue to drag a little bit more. “There’s no surprise as far as weak economic data is concerned and markets have already corrected a bit in anticipation of the same.
But, nevertheless, we
may see some more drag with the Nifty likely to continue trading in 6200-6400 range in the near term, unless it breaks 6200 convincingly.”
As at 8.45 pm on Thursday, the Nifty December futures on Singapore were trading with a loss of 0.80% or 49 points at 6204.
Gaurang Shah, assistant vice-president, Geojit BNP Paribas Financial Services, believes that with the IIP and CPI data coming in negative, there could be some more pressure on the Nifty early today. “Friday being the last day of the trading week, we expect a negative bias on the overall markets, except for sectors like IT and pharma.”
Just Dial gains on FTSE index entry
Shares in search service provider Just Dial gained 1.6% to Rs 1,162 on NSE on Thursday after London’s index compiler FTSE said it will include the stock in its FTSE AllCap index, effective from the start of trading on December 23, when Just Dial will list on the London Stock Exchange. FTSE also raised the ‘investability weight’ in its global equity index series of HCL Technologies to 38% from 30% and that of Tech Mahindra to 45% from 24%, according to a statement on its website.