Indian equity markets slip on US Fed rate hike

The rate-hike is expected to lead foreign portfolio investors away from emerging market such as India and also dent business margins as access to capital from the US will become expensive.

Published: 15th June 2017 07:07 PM  |   Last Updated: 15th June 2017 07:07 PM   |  A+A-

Image used for representational purpose only.


Mumbai: The Indian equity markets slipped into the negative territory on Thursday, a day after US Federal Reserve hiked its benchmark rates.

The rate-hike assumes significance as it is expected to lead foreign portfolio investors away from emerging markets such as India, and also dent business margins as access to capital from the US will become expensive.

Heavy selling pressure was witnessed in oil and gas, automobile and capital goods stocks.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) fell by 40.10 points or 0.42 per cent to close at 9,578.05 points.

The 30-scrip Sensitive Index (Sensex) of the BSE, which opened at 31,222.89 points, closed at 31,075.73 points -- down 80.18 points or 0.26 per cent from its previous close at 31,155.91 points.

The Sensex touched a high of 31,229.44 points and a low of 31,026.48 during intra-day trade.

The BSE market breadth was, however, bullish -- with 1,375 advances and 1,271 declines.

In terms of the broader markets, the BSE mid-cap index underperformed the Sensex, while the small-cap index outperformed it. The S&P BSE mid-cap index was down 0.12 per cent, and the small-cap index was up 0.37 per cent.

"Markets drifted down further to finally end with losses on Thursday. Weakness in global stocks post rate-hike by the US Federal Reserve weighed on the sentiment on the domestic bourses," Deepak Jasani, Head - Retail Research, HDFC Securities, told IANS.

"Major Asian markets ended lower barring the Taiwan and Shanghai indices. European indices like FTSE 100, CAC 40 and DAX traded lower."

The US Federal Reserve on Wednesday raised its benchmark interest rates for the third time since December and unveiled plans to start trimming its balance sheet. The rate is a 25 basis points increase over the current one of 0.91 per cent.

On the currency front, the rupee weakened by 24 paise to 64.54 to a US dollar from its previous close of 64.30.

In investments, provisional data with the exchanges showed that foreign institutional investors (FIIs) sold stocks worth Rs 645.35 crore, while domestic institutional investors (DIIs) bought scrips worth Rs 854.85 crore.

"Market turnover was significantly higher compared to yesterday (Wednesday) in all the segments -- derivatives, futures and options. Top gainers in the NSE were Auropharma, Wipro, Cipla and RIL while IOC, BPCL, TCS and Infratel were top losers," said Dhruv Desai, Director and Chief Operating Officer of Tradebulls.

Sector-wise, the S&P BSE oil and gas index declined by 158.70 points, the automobile index by 131.72 points and the capital goods index by 120.20 points.

On the other hand, the S&P BSE healthcare index rose by 123.04 points, the realty index by 43.95 points, and the FMCG index by 13.89 points.

Major Sensex gainers on Thursday were: Reliance Industries (RIL), up 2.11 per cent at Rs 1,384.50; Wipro, up 1.86 per cent at Rs 260.80; Cipla, up 1.74 per cent at Rs 549.15; Dr Reddy's Lab, up 1.27 per cent at Rs 2,699; and Sun Pharma, up 1.08 per cent at Rs 544.30.

Major Sensex losers were: Tata Consultancy Services (TCS), down 2.42 per cent at Rs 2,411.10; Larsen and Toubro, down 1.46 per cent at Rs 1,735.80; ONGC, down 1.18 per cent at Rs 167.50; Mahindra and Mahindra, down 1.16 per cent at Rs 1388.75; and Coal India, down 1.13 per cent at Rs 254.40.

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