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Liquidity concerns, weak rupee dent equity indices

Concerns over a liquidity crunch impacting the NBFC space, along with fears over a rise in interest rates and a weak rupee, subdued the key domestic equity indices on Monday.

Additionally, almost all indices ended in the red. Heavy selling pressure was especially witnessed in the energy counters which fell over two per cent.

Consequently, the Indian stock market indices — S&P BSE Sensex and NSE Nifty50 — during the final hour of the day’s trade, ceded their gains made on the back of global cues.

Besides, the Indian rupee weakened to 73.56 against a greenback, while global crude oil prices stood around $80-per-barrel.

Index-wise, the S&P BSE Sensex opened on Monday at 34,689.39 points from its previous close of 34,315.63 points.

The NSE Nifty50 closed at 10,245.25 points down 58.30 points or 0.57 per cent.

According to Vinod Nair, Head of Research, Geojit Financial Services: “Despite a positive opening in global market, Nifty traded range bound and ended on a negative note due to concerns on liquidity and interest rate.”

“Mid and small cap under-performed, while mixed earnings from index heavy weights dragged investor’s sentiment. There is a risk of earnings to downgrade in the future since Nifty50-index earnings growth is less than 10 per cent in HIFY19, based on Q1FY19 review and Q2FY19 preview.”

In terms of currency, the Indian rupee closed at 73.56 to a USD, weaker by 15 paise from its previous close of 73.41.

Investment-wise, provisional data with the exchanges showed that foreign institutional investors sold stocks in the tune of Rs 511.91 crore, whereas domestic institutional investors bought scrip worth just Rs 303.21 crore.

Stock-wise, HDFC Bank’s scrip gained 1.38 per cent to Rs 1,996.25 a share from its Friday’s close.

The lending major last Saturday reported a 20.6 per cent increase in its net profit during the quarter ended September 30.

HDFC Securities’ Retail Research Head Deepak Jasani said: “The weakness was led by a
slide in index pivotals Reliance Industries, IndusInd Bank and Kotak Mahindra Bank.”

“Technically, with the Nifty correcting further, traders will need to watch if the index can now hold above the immediate supports of 10,224 points; else a further correction is likely.”

The top gainers in the Sensex were ICICI Bank, up 3.84 per cent at Rs 327; NTPC, up 1.95 per cent at Rs 165; Bajaj Auto up 1.86 per cent at Rs 2,556.80; Vedanta, up 0.99 per cent at Rs 213.25 and Maruti Suzuki up 0.76 per cent at Rs 6,814.

Major losers included IndusInd Bank, down 8.52 per cent at Rs 1,442.20; Reliance Industries, down 3.56 per cent at Rs 1,062.45; Tata Motors (DVR), down 3.18 per cent at Rs 92.90; Yes Bank, down 3.08 per cent at Rs 211; and ONGC, down 3.07 per cent at Rs 156.10 per share.

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