Profit booking drags equity markets lower

Mumbai: Profit booking, combined with negative global cues and a weak rupee, subdued the Indian equity markets on Tuesday resulting in the key indices trading marginally in the red during the mid-afternoon session with heavy selling pressure witnessed in banking, consumer durables and capital goods stocks. The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged lower by 25 points, or 0.30 per cent, at 8,213.50 points. The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 26,907.42 points, traded at 26,798.09 points (at 1.45 p.m.) -- down 68.83 points or 0.26 per cent from the previous close at 26,866.92 points. The Sensex has so far touched a high of 26,925.64 points and a low of 26,754.60 points during the intra-day trade. The BSE market breadth was tilted in favour of the bears -- with 1,184 declines and 1,244 advances. Both the key Indian indices ended in the green on Monday, following economic reforms and higher global equity markets. The barometer index had surged by 241.01 points or 0.91 per cent, while the NSE Nifty had risen by 68.30 points or 0.84 per cent. Initially on Tuesday, the equity markets opened on a flat-to-positive note, in-sync with their Asian peers.  The Asian markets gained on the back of increased chances of Britain staying on in the Eurozone. The island nation will go in for a referendum on this issue later this week. However, profit booking, consolidation and negative European markets dragged the key domestic indices lower.  Further, investors were seen concerned about US Federal Reserve Chairperson Janet Yellen's testimony to the US Congress. The testimony can provide further cues towards the next phase of the key lending rate hikes. In its two-day policy meet last week, the US FOMC (Federal Open Market Committee) decided to maintain its key lending rates. The US Fed signalled its intention to limit the times it might increase key lending rates due to weak domestic jobs market. A hike in the US interest rates can potentially lead FPIs (Foreign Portfolio Investors) away from emerging markets such as India. Besides, lower global crude oil prices and a weak rupee eroded investors' risk-taking appetite.  "Profit booking and some consolidation was witnessed. Lower European markets, crude oil prices and a weak rupee too dented equity markets," Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS. Dhruv Desai, Director and Chief Operating Officer of Tradebulls, banking and pharma stocks traded with sideways to bearish sentiments on profit booking. "Auto sector stocks witnessed some buying support," Desai said. According to Nitasha Shankar, Senior Vice President for Research with YES Securities, broader markets continued to witness active participation to outperform the headline indices.  "Nifty index continues to oscillate in a trading range of 200 points from 8050-8250. Next trending move could be witnessed on a trade beyond this range on higher volumes," Shankar said.