Mumbai: The logjam in parliament and anxiety surrounding a rate hike in the US subdued the Indian equity markets on Thursday, with a barometer index closing the day's trade in the red.
A day after it gained 323 points, the 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE) closed the day's trade deep in the red. It lost 134.09 points or 0.47 percent.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) too closed in negative territory. It fell by 43.70 points or 0.51 percent at 8,589.80 points.
The S&P BSE Sensex opened at 28,540.97 points and closed at 28,370.84 points, down 134.09 points or 0.47 percent from the previous day's close at 28,504.93 points.
The Sensex touched a high of 28,578.33 points and a low of 28,315.37 points in the intra-day trade.
Analysts said the markets were subdued on account of the logjam in parliament, which is delaying the passage of bills relating to the goods and services tax (GST) and land acquisition.
"Yesterday's positive signs that there is a consensus building up to pass the GST in Rajya Sabha was dashed today because of continuous logjam. The same disruptions also delayed any movement on the land bill," Anand James, co-head, technical research, Geojit BNP Paribas, told IANS.
"The political deadlock and protests in parliament are causing anxiety over the governments ability to conduct any business during the monsoon session (that runs till mid-August)," he added.
James pointed out that the markets had factored in a rise in US home sales, which grew by 3.2 percent in June to 5.49 million.
Key economic data revealed a recovery in the US economy just before the FOMC (Federal Open Market Committee) meet on July 29, which will give further clues as to when the rate hike might take place there.
With higher interest rates in the US, the FPIs (Foreign Portfolio Investors) are expected to be led away from emerging markets such as India.
The FOMC meet is followed by the future and options (F&O) expiry in the Indian equity markets on July 30. The Indian monetary policy review by the Reserve Bank of India (RBI) is scheduled for August 4. All these upcoming events are making the markets volatile.
The markets also expect a rate cut by the RBI during its monetary policy review as it may be the last time in this calendar year to cut lending rates before inflation spirals up again and the US Fed decides on its own rates in September.
Gaurav Jain, director with Hem Securities said that week earnings by some key corporate, falling prices of commodities across the world weighed on the investor’s sentiments.
Sector-wise, healthy buying was observed in consumer durables, automobile and oil and gas stocks. However, banks, capital goods and healthcare scrip came under intense selling pressure.
The S&P BSE consumer durables augmented by 177.19 points, the automobile index gained by 94.18 points and the oil and gas index rose by 48.69 points.
The BSE S&P bank index declined by 155.51 points, the capital goods index receded by 125.10 points and healthcare index was lower by 108.55 points.
Major Sensex gainers during Thursday's trade were: Tata Motors, up 3.11 percent at Rs.401.35; Dr.Reddy's Lab, up 1.62 percent at Rs.3,910.35; Mahindra and Mahindra (M&M), up 1.25 percent at Rs.1,358.35; Maruti Suzuki, up 1.11 percent at Rs.4,235.65; and NTPC, up 0.77 percent at Rs.138.25.
The major Sensex losers were: Lupin, down 5.23 percent at Rs.1,728.60; Bajaj Auto, down 5.02 percent at Rs.2,487.75, Tata Steel, down 3.58 percent at Rs.270.30, Tata Consultancy Services (TCS), down 1.59 percent at Rs.2,487.95; and Bharti Airtel, down 1.54 percent at Rs.432.60.
Among the Asian markets, Japan's Nikkei was up by 0.44 percent, China's Shanghai Composite Index rose by 2.44 percent, and Hong Kong's Hang Seng gained by 0.46 percent.
In Europe, the London FTSE 100 index inched up by 0.02 percent, while the French CAC 40 also gained by 0.02 percent. Germany's DAX Index fell by 0.10 percent at the closing bell.