Profit booking, global signals weaken equity indices; Computer stocks fall

Mumbai, Jan 6 (IANS): Profit bookings along with negative global indices shattered major Indian stock markets – S&P BSE Sensex and NSE Nifty50 – a four-day winning streak on Thursday.

Initially, the two key indexes had a lower open caused by weakness in the US markets the previous day.

Globally, Asian equity markets tumbled after Federal Reserve meeting minutes indicated a faster-than-expected rise in U.S. interest rates on concerns about lingering inflation. Similarly, European equities started with losses as overseas traders had their first chance to react to the minutes of the Federal Reserve’s latest interest rate setting committee. On the home front, volumes on the NSE were a bit higher than the recent average.

Among the sectors, the telecommunications index rose the most while real estate and IT fell the most.

Consequently, the Sensex and Nifty settled at 59,601 points and 17,748 points, respectively, down 1.03% and 0.99% from their previous close.

“Nifty fell as expected after a strong four-day rise. However, the rate of anticipated decline is still 1:1, suggesting general market strength amid the index heavyweight sell-off,” said Deepak Jasani, Head of Retail Research, HDFC Securities.

“Local traders hoard mid-cap and small-cap stocks ahead of Union budget and company results for Q3FY22.”

According to Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services: “Although the market trend may be volatile in the short term due to the potential risk of the Omicron variant, the upcoming budget and fragile global signals, in the long term , strong earnings on delivery and positive macro data hold the key to boosting markets.”

Further, S. Ranganathan, Head of Research at LKP Securities, said, “The day saw a lower open amid weak global signals and hawkish FOMC minutes that saw the US yield at 10 years climb to 1.7%.

“Bulls were a little limited due to the increase in Covid cases and its impact on business performance in the fourth quarter, as this is an important quarter for India Inc. The IT index and Oil & Gas led the fall, with cement stocks also posting gains.