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US rate-hike fear, weak rupee pull equity indices lower

IANS | Mumbai |

Caution over a US Federal Reserve rate-hike in December, coupled with a weak rupee and profit booking by investors, pulled the key Indian equity indices lower to close in the red on Thursday.

According to market observers, an upsurge in pharma heavyweights like Dr. Reddy’s Lab, Lupin, Cipla and Sun Pharma, along with pumping in of funds by domestic institutional investors (DIIs), however, aided to trim some losses.

The wider Nifty50 of the National Stock Exchange (NSE) fell by 19.25 points, or 0.19 per cent, to close at 10,121.90 points.

The 30-scrip Sensitive Index (Sensex) of the BSE closed at 32,370.04 points — down 30.47 points, or 0.09 per cent, from its previous close. It touched a high of 32,462.61 points and a low of 32,164.42 during intra-day trade.

The BSE market breadth was bearish with 1,581 declines and 993 advances.

“Markets ended with modest losses on Thursday after a sharp recovery from the lows. Pharma stocks were in limelight,” Deepak Jasani, Head – Retail Research, HDFC Securities, told IANS.

“The markets, however, watched subdued trading on Asian bourses after the outcome of the Federal Reserve meeting. Major Asian markets ended on a mixed note, while European indices like FTSE 100, DAX and CAC 40 traded higher,” said Jasani.

In terms of the broader markets, the S&P BSE mid-cap index fell by 0.34 per cent and the small-cap index by 0.51 per cent.

Vinod Nair, Head of Research, Geojit Financial Services, said: “Fall in rupee on account of Fed’s plan to unwind the balance sheet and a rate hike by the end of the year impacted the market sentiment.”

“However, market gradually recovered from low as liquidity was driven to export oriented sectors like IT and pharma to take the benefit of the dollar and of regulatory approvals,” Nair added.

During the day, the rupee weakened by 54-55 paise to 64.81 against the US dollar from its previous close at 64.26-27.

In terms of investments, provisional data with the exchanges showed that foreign institutional investors (FIIs) sold scrip worth Rs 1,204.95 crore while DIIs purchased stocks worth Rs 1,416.55 crore.

“Benchmark indices pared some of the morning losses to end flat after pharma stocks rallied on positive corporate announcements,” said Dhruv Desai, Director and Chief Operating Officer of Tradebulls.

“The Nifty Pharma index rose over 3 per cent hitting 7-week high on Thursday,” Desai told IANS.

Sector-wise, the S&P BSE metals consumer durables index dipped by 259.76 points, banking index by 208.79 points and automobile index by 115.69 points.

On the other hand, the S&P BSE healthcare index surged by 377.56 points, IT index was up 17.95 points and telecom index was a tad up by 0.37 points.

Major Sensex gainers on Thursday were: Dr. Reddy’s Lab, up 7.47 per cent at Rs 2,486.45; Cipla, up 4.04 per cent at Rs 591.45; Lupin, up 3.02 per cent at Rs 1,032.45; Sun Pharma, up 2.59 per cent at Rs 519.55; and Tata Consultancy Services, up 1.34 per cent at Rs 2,525.85.

Major Sensex losers were: Tata Motors (DVR), down 2.14 per cent at Rs 233.25; ICICI Bank, down 1.99 per cent at Rs 285; Axis Bank, down 1.37 per cent at Rs 512.25; Coal India, down 1.09 per cent at Rs 253.60; and ONGC, down 0.93 per cent at Rs 166.