Indices drop for 3rd straight day ahead of inflation data, key IT earnings

Ahead of the US inflation report later in the day, investors remained on edge on Dalal Street as equity indices closed in the red for the third straight day on Thursday in a volatile trading session. Index heavyweight Reliance, banking and financial stocks were a drag on the indices.

The BSE Sensex index ended 147 points or 0.25% lower at 59,958, while Nifty50 fell 37 points or 0.21% to settle at 17,858.

From the Sensex pack, Reliance was the top loser, falling about 2%. Axis Bank, Tata Motors, Kotak Bank, Bharti Airtel and Bajaj Finserv also ended with cuts. However, UltraTech Cement, L&T, HCL Tech, Maruti and Infosys closed with gains.

Sectorally, the Nifty Oil & Gas fell 1.02% and Nifty Bank declined 0.36%. While auto, media, realty and IT stocks closed higher. In the broader market, Nifty Midcap50 plunged 0.42% and Smallcap50 dropped 0.09%.

The domestic market continued to remain volatile as investors eagerly awaited the earnings of IT majors after a cautious warning from TCS, Vinod Nair, Head of Research at Geojit Financial Services said.

“FIIs continue to dump Indian equities in search of cheaper investment avenues. Uncertainties over upcoming inflation numbers at home and the US kept the domestic market unstable, even as western peers stayed optimistic,” Nair added.

Global Markets
Asian stocks hovered below seven-month highs, as investors waited to see whether US data will confirm inflation is in retreat.

China's blue-chip CSI 300 Index edged up 0.2% at close, while the Shanghai Composite Index added 0.1%. Whereas, Nikkei 225 ended the day up 0.01% at 26,449.82, after touching 26,547.61 for the first time since December 27.

The regionwide Stoxx 600 rose 0.58% to a fresh near-nine-month high, as Britain's blue chip FTSE 100 gained a similar amount to reach a new three-and-a-half-year top, and German, French and Spanish benchmarks were all in the green.

Currency Watch
The rupee ended little changed after three days of gains on Thursday. It finished the session at 81.55 per dollar to recoup mild losses, versus its previous close of 81.57. The currency had gained 1.40% over the past three sessions after four weeks of range-bound movement.

Crude Impact
Oil steadied on Thursday as optimism over China's demand outlook was tempered by caution over whether upcoming inflation data from the United States will point to a slower increase in interest rates.

Brent crude rose 1.1%, to $83.59 a barrel, while US West Texas Intermediate crude gained 1.05% to $78.25. Both benchmarks rose 3% on Wednesday driven by optimism about the global economy.

(With inputs from agencies)