Indian indices erase sharp initial gains to close lower - Standard Chartered Securities

Key benchmark indices erased sharp initial gains and ended sharply lower in choppy trade as the Indian Rupee (INR) hit record low below 64 against the US Dollar (USD) on rising expectations that the US Federal Reserve will soon start withdrawing its monetary stimulus to the US economy. Weakness in European stocks also dampened sentiment.

Auto stocks reversed intraday gains. Pharma stocks edged lower. IT stocks edged lower on profit taking. Power equipment maker Bharat Heavy Electricals (Bhel) gained on bargain hunting after recent slide. Metal stocks declined. Bank stocks cut steep initial gains triggered by the RBI on Tuesday relaxing some rules that will help banks deal with the notional or marked-to-market (MTM) loss in their government bond portfolios due to a recent sharp fall in bond prices.

Markets expected to open lower after Federal Reserve minutes showed officials support stimulus cuts this year if the US economy improves. The US dollar (USD) strengthening against the Indian rupee (INR) would further impact the sentiment.

Source : Equity Bulls

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