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Profit booking subdues equities; rupee, oil prices hurt sentiments

Mumbai, Nov 7 (IANS) Negative European markets, coupled with a weak rupee and profit booking in healthcare, consumer durables and banking stocks subdued the key Indian equity indices on Tuesday, with the BSE Sensex shedding over 350 points and the NSE Nifty50 closing at almost a week's low.

According to market observers, a surge in oil prices and heavy selling pressure in index heavyweights like Lupin, Cipla, Bharti Airtel, State Bank of India (SBI) and Tata Motors, among others, pulled the benchmarks lower to close with substantial losses.

However, the S&P BSE IT and Teck (media, entertainment and technology) indices ended with gains.

The slide in the markets came after the barometer 30-scrip Sensitive Index (Sensex) of the BSE touched its new record intra-day high of 33,865.95 points in the early morning trade.

The BSE Sensex closed lower by 360.43 points, or 1.07 per cent, at 33,370.76 points.

On closing basis, the wider Nifty50 of the National Stock Exchange declined by 101.65 points, or 0.97 per cent, to 10,350.15 points.

The BSE market breadth was bearish -- 1,916 declines and 839 advances.

"Markets ended sharply lower on Tuesday as the Nifty broke the 10,400 levels in the afternoon session. Nifty touched almost a one week low and closed 0.97 per cent lower," Deepak Jasani, Head - Retail Research, HDFC Securities, told IANS.

"Rising crude oil prices and a weakening rupee seemed to spoil the investor sentiments. Major Asian markets have ended on a positive note, barring the KOSPI index, while European indices like FTSE 100 and CAC 40 traded lower," Jasani added.

In terms of the broader markets, the BSE mid-cap closed lower by 1.47 per cent and the small-cap index lost 1.37 per cent.

According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, Indian shares, bonds and the rupee fell on Tuesday after oil prices surged overnight to their highest since mid-2015, raising concerns about the inflation outlook and hit major oil refiners stocks.

On the currency front, the rupee weakened by 35 paise to close at 65.03 against the US dollar from its previous close at 64.68.

"The rise in oil prices is seen as likely to prevent the Reserve Bank of India from cutting interest rates anytime soon, even as economic growth has slowed to a three-year low -- removing a potential trigger for markets. Oil prices rose 3.5 per cent on Monday, the highest since early July 2015," Desai told IANS.

"Pharma stocks fell after Lupin said in a notice to the BSE that it got warning letter from US food and Drug regulator for its Goa and Indore unit II plant. Shares of aviation companies, Jet Airways, SpiceJet, and InterGlobe Aviation, fell 3-5 per cent on the back of surge in crude oil prices on a global scale," he added.

In terms of investments, provisional data with the exchanges showed that foreign institutional investors invested in scrips worth Rs 461.47 crore whereas domestic institutional investors divested in stocks worth Rs 2,046.07 crore.

Vinod Nair, Head of Research, Geojit Financial Services, said: "Political disturbance in Saudi is triggering high volatility in the crude prices, which is negative for India leading to depreciation in rupee."

"Additionally, continuous negative observations by USFDA (Food and Drug Administration) on high quality Indian pharma companies are leading to a downgrade for the sector."

Sector-wise, the S&P BSE healthcare index plunged by 510.98 points, followed by consumer durables index by 410.99 points and banking index by 366.04 points.

On the other hand, the S&P BSE IT index rose by 215.85 points and Teck index by 73.19 points.

Major Sensex gainers on day were: Infosys, up 2.92 per cent at Rs 955.70; Tata Consultancy Services, up 1.55 per cent at Rs 2,708.35; Wipro, up 0.87 per cent at Rs 302.10; Kotak Bank, up 0.36 per cent at Rs 1,012.30; and ITC, up 0.32 per cent at Rs 265.65.

Major Sensex losers were: Lupin, down 16.84 per cent at Rs 860.50; Cipla, down 7.18 per cent at Rs 608.35; SBI, down 3.57 per cent at Rs 317.20; Tata Motors (DVR), down 3.47 per cent at Rs 250.25; and Bharti Airtel, down 3.45 per cent at Rs 514.35.

--IANS

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