Growth concerns, fund outflows dent equities
Concerns over slowing growth along with the outflow of foreign funds pulled the Indian equity market lower on Wednesday. While the S&P BSE Sensex closed 193.65 points or 0.48 per cent lower at 39,756.81, the NSE Nifty50 was down 59.40 points or 0.50 per cent at 11,906.20.
Plunge in May automobile sales coupled with negative global cues, such as US-China trade tensions, and caution ahead of key industrial and inflation data dented investors' sentiments. But a sharp downward correction in crude oil prices arrested the free fall.
Sectorally, the top gainers were auto, banks, capital goods, telecom and realty indices, and the top losers metals and FMCG.
"The headline indices -- the Sensex and the Nifty -- ended lower on Wednesday amid US-China trade tensions. Most Southeast Asian markets fell on Wednesday with Malaysia leading the decline as escalating tensions on the US-China trade front and concerns of slowing growth in China curbed risk sentiment," said Deepak Jasani, Head of Retail Research, HDFC Securities.
"Technically, with the Nifty correcting from the recent lower high of 12,000-mark, there is a possibility of further weakness in the coming sessions. The lower levels in the next few sessions to be watched are 11,820 and 11,800. Immediate resistance level to be watched is 11,965."
According to Vinod Nair, Geojit Financial Services Head of Research, the market retreated the winning streak as headwinds from global markets and concerns that CPI inflation may rise to the 7-month high in May impacted the momentum.
"A steep fall of 21 per cent in passenger vehicle sales added fuel to investors' concerns over demand and liquidity crunch with non-banking finance companies (NBFCs). The market will consolidate as long as there are no fresh triggers and await more clarity on how NBFC-related concerns pans out."
While the foreign institutional investors (FIIs) sold stocks worth Rs 1,050.43 crore, domestic institutional investors (DIIs) bought Rs 271.15 crore stocks.
On the currency front, the Indian rupee on Tuesday strengthened by 10 paise to 69.35 against the US dollar from its previous close of 69.45. IANS