MUMBAI:The European Central Bank’s (ECB) monetary policy action which fell short of markets’ expectations and US Federal Reserve chairwoman’s comments on interest rates spook sentiments on D-Street on Friday. The rupee slipped to 67 levels against the US dollar to its two-year low during the intra-day on heavy foreign fund selling.Indian markets dropped to its lowest levels in more than two weeks and logged third straight session of losses on Friday. Tracking global markets selloff, Sensex declined 248 points, or 0.96%, to close at 25,638. Nifty fell 82 points, or 1.05%, to end at 7,781 points, below the crucial psychological level of 7,800.

“The expected downside in an event of US Federal Reserve interest rate hike appears to be diminishing and the near term floor for Nifty is seen around 7,700,” said Ravi Sundar Muthukrishnan, senior vice president, co-head research at ICICI Securities.The European Central Bank (ECB) slashed its deposit rate into negative territory, and extended its asset buying programme by six months. But markets across the globe reacted negatively as the deposit rate cut and stimulus package fell short of expectations.

Among the European indices, UK’s FTSE 100 traded 0.35% lower, Germany’s DAX and France’s CAC 40 declined about 0.50% during first half of trade; while among Asian markets China’s Shanghai Composite index closed 1.67% down, and Hang Seng dropped 0.81%.Anand Rathi Securities’ derivative analyst, Chandan Taparia said: “As the markets have factored in an interest rate hike by the US Federal Reserve, we expect Nifty to find support-based buying at lower levels. Domestic institutional investors (DII) have been significant buyers in index stocks and this gives lot of confidence to markets.”

The foreign institutional investors (FIIs) were net sellers of Indian stocks worth Rs 1,745 crore on Thursday. However, domestic institutional investors (DIIs) bought stocks worth Rs 1,069 crore.D-Street participants are also worried about the government facing a possible deadlock in the ongoing Winter Session of Parliament, which may stall the progress of key legislative bills, including the Goods and Services Tax (GST). HDFC and M&M tanked the most, down 2.42% each. Of the 30-shares in Sensex, 26 ended in the red. NTPCBSE -2.28 %, ITCBSE -2.19 %, ICICI BankBSE -1.71 %, Tata MotorsBSE -1.36 % and RIL too lost. However, Sun Pharma was a bright spot, which soared 4.02%.

Courtesy : economictimes.indiatimes.com/

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