Benchmark indices end in red on the back of profit taking in IT, PSU stocks

Benchmark indices ended in the red on Friday on the back of profit taking seen in IT stocks as well as PSU stocks, said S Ranganathan, Head of Research at LKP Securities.

The 6 per cent deficiency in monsoon was an important factor with several states witnessing deficits across districts. The Evergrande Bankruptcy in China though was brushed away since real-estate loans in India are by and large regulated well now, Ranganathan said.

Domestic equities had a weak start in line with its global peers. Nifty remained in the negative territory throughout the session and closed with a loss of 83 points (-0.4 per cent) at 19,282 levels, while the BSE-Sensex dropped 202.36 points or 0.31 per cent to settle at 64,948 levels.

Among sectors, PSU bank, metals and FMCG ended in the green.

Global markets extended their losses as concerns over higher interest rates and slowing China’s economy weighed on investors. Even domestically, markets have been consolidating in the absence of any positive trigger and consistent selling by FIIs, said Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services.

Vinod Nair, Head of Research at Geojit Financial Services, said concerns regarding inflation and shifts in investor preferences towards safer assets dampened overall market sentiment for domestic equities.

Fears of a US Fed rate hike, coupled with a decline in global equities, exerted additional downward pressure, specifically on IT stocks. Higher US bond yields and default risk in China are poised to prompt FIIs to adopt a more prudent stance when considering investments in the emerging markets, Nair said.