Bihar polls outcome, US data subdue markets; Sensex closes in red
Mumbai, Nov 6: Extreme volatility prevailed at the Indian equity markets on Friday as investors were spooked ahead of the Bihar election results coupled with the upcoming key US economic data.
The choppy trade session led a barometer index of Indian equity markets to close the day's trade marginally in the red.
Furthermore, both the bellwether indices of the Indian equity markets were impacted by disappointing quarterly results posted by India Inc.
Mixed signals from Asian and European indices ahead of the key US employment data for October eroded investors' confidence.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) ended the day's trade flat. It inched down by 1.15 points or 0.01 percent at 7,954.30 points.
Similarly, the barometer 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE) closed marginally in the red.
It opened at 26,824.01 points, and closed at 26,265.24 points, down 38.96 points or 0.15 percent from the previous day's close at 26,304.20 points.
The Sensex touched a high of 26,438.86 points and a low of 26,190.18 points in the intra-day trade.
Market observers said that investors were spooked after Thursday's exit polls on Bihar assembly elections failed to throw up a clear winner.
"Investors were anxious about the Bihar elections outcome. The anxiety was further flared up after the exit polls failed to provide a clear picture," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
"Investors avoided taking long positions ahead of the Bihar elections verdict which is due on November 8."
On Thursday, four out of six exit polls predicted a victory for Nitish Kumar-led "Grand Alliance", while two polls showed Bharatiya Janata Party (BJP) in the lead.
Vaibhav Agrawal, vice president, research, Angel Broking, told IANS: "Markets continued to remain nervous ahead of the Bihar election results on Sunday after opinion polls indicated an edge to the Janata Dal (United) alliance."
"Investors will also watch out for US jobs data due later today for further cues on the rate hike," Agrawal added.
The US jobs data, to be released on late Friday, is expected to give cues on whether the US Fed will raise interest rates in its December meeting. The US Fed is slated to conduct its Federal Open Market Committee (FOMC) during December.
The FOMC assumes significance as higher interest rates in the US are expected to lead away FPIs (Foreign Portfolio Investors) from emerging markets such as India.
Gaurav Jain, director with Hem Securities, said: "Indices cracked on the pessimism that the National Democratic Alliance (NDA) government may not see a victory in Bihar elections."
"Continued selling pressure by foreign portfolio investors (FPIs) and depreciating rupee also played the havoc," Jain added.
The rupee closed the day's trade weaker at 65.76 to a US dollar from its previous day's close of 65.75 to a greenback.
The foreign institutional investors (FIIs) were net buyers in the day's trade, whereas the domestic institutional investors (DIIs) were net sellers.
According to data with stock exchanges, the FIIs bought stocks worth Rs.219.17 crore, while the DIIs sold stocks worth Rs.39.45 crore.
Sector-wise, healthcare, automobile and metal stocks declined in the day's trade.
On the other hand, banking, information technology (IT), technology, entertainment and media (TECK) scrip made gains on Friday.
The S&P BSE Healthcare index plunged by 495.48 points, automobile index receded by 136.64 points, metal index plummetted by 28.77 points.
The banking index augmented by 123.47 points, IT index gained by 89.06 points and TECK index was higher by 40.30 points.
Major Sensex gainers during Friday's trade were State Bank of India (SBI), up 3.86 percent at Rs.243.25; Reliance Industries, up 1.67 percent at Rs.952.45; Infosys, up 1.39 percent at Rs.1,138.05; Coal India, up 1.29 percent at Rs.341.65; and Bharti Airtel, up 0.92 percent at Rs.339.
The major Sensex losers were DrReddy's Lab, down 14.65 percent at Rs.3,629.55; Tata Steel, down 2.44 percent at Rs.220.10; Gail, down 2.22 percent at Rs.288.65; Vedanta, down 1.97 percent at Rs.92.25; and Tata Motors, down 1.87 percent at Rs.396.25.