Caution ahead of monetary policy review pulls Nifty lower

Caution ahead of the upcoming domestic monetary policy review, broadly negative global cues and a weak rupee pulled the Indian equities markets lower today.

The key indices were dragged lower by profit booking to close the day’s trade in the red.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) inched down 32.75 points or 0.37 per cent to 8,768.30 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 28,443.23 points, closed at 28,335.16 points — down 104.12 points or 0.37 per cent, from the previous close at 28,439.28 points.

The Sensex touched a high of 28,483.41 points and a low of 28,239.12 points during intra-day trade.

The BSE market breadth was tilted in favour of the bears — with 1,561 declines and 1,324 advances.

In terms of the broader markets, the BSE mid-cap index fell by 0.18 per cent, while the BSE small-cap index inched down by 0.09 per cent.

On Monday, the benchmark indices surged on the back of positive global cues to hit their five-month closing highs.

The NSE Nifty had inched up 60.10 points or 0.69 per cent to close at 8,801.05 points, while the BSE Sensex was up 198.76 points or 0.70 per cent at 28,439.28 points.

“Markets ended lower today after witnessing a surge in the previous session. Selling pressure intensified in the afternoon session,” Deepak Jasani, Head – Retail Research, HDFC Securities, said.

“Major Asian markets too have ended lower barring the Singapore and Taiwan indices. European indices like FTSE 100, CAC 40 and DAX however traded higher.”

According to market observers, investors stayed on the sidelines ahead of the central bank’s policy decision on Wednesday.

“The RBI (Reserve Bank of India) rate decision is likely to be a close call, with favourable macros on one hand and rising oil and liquidity build-up post demonetisation on the other,” said Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services.

The RBI is expected to conduct its sixth and final bi-monthly monetary policy review of the current fiscal on February 7-8, 2017.

“Rupee’s weakness after six consecutive days of strengthening also may have added to the negative sentiments,” James added.

The Indian rupee depreciated by 19 paise to 67.41 against a US dollar from its previous close of 67.22 to a greenback.

In terms of investments, the provisional data with exchanges showed that foreign institutional investors (FIIs) purchased stocks worth Rs 201.13 crore, while the domestic institutional investors (DIIs) purchased scrip worth Rs 1,620.03 crore.

Sector-wise, Dhruv Desai, Director and Chief Operating Officer of Tradebulls, pointed out: “IT stocks traded with bearish sentiments and failed to recover from lower levels, while banking, pharma, auto, oil-gas, textile and aviation stocks faced resistance at higher levels due to profit booking.”

“Media-entertainment stocks traded with mixed sentiments while FMCG, cement and power stocks also traded down due to selling pressure at higher levels.”

The S&P BSE automobile index plunged by 207.97 points, followed by the metal index, which declined by 147.78 points, and the oil and gas index, which fell by 110.82 points.

On the other hand, the S&P BSE capital goods index augmented by 170.36 points, the consumer durables index edged up by 34 points, and the IT index rose by 22.61 points.

Major Sensex gainers today were: Infosys, up 1.10 per cent at Rs 944.75; Larsen and Toubro (L&T), up 1.02 per cent at Rs 1,500.05; Maruti Suzuki, up 0.89 per cent at Rs 6,205.90; Asian Paints, up 0.50 per cent at Rs 996.80; and HDFC, up 0.44 per cent at Rs 1,405.75.

Major Sensex losers were: Tata Motors, down 3.52 per cent at Rs 506.80; Coal India, down 2.88 per cent at Rs 315.60; ONGC, down 2.86 per cent at Rs 193.30; Adani Ports, down 1.86 per cent at Rs 303.85; and Lupin, down 1.73 per cent at Rs 1,468.40.

In the cash segment FIIs were buyers to the tune of Rs 201 crores and DIIs net buyers to the tune of  Rs  1620 crores

FII positions in Index puts, futures and calls.

Nifty Put Call Ratio (PCR) data shows support at 8700 and resistance at 8800

(With agency inputs)