Mumbai, India (BBN) – The BSE Sensex and Nifty gave up most of their intra-day gains on Friday amid profit-taking.
At its day’s high, the Sensex rose over 450 points to 26,687.33 while Nifty hit 8,091. European markets struggled on the day, also weighing on the sentiment.
At 3:03 p.m., Sensex was up 130 points at 26,361 while Nifty traded near 8,000. The rupee weakened to 66.20 at its day’s low, reports NDTV.
Here are top 10 developments:
1) Asian shares extended a global rally on Friday after upbeat US economic data calmed sentiment. Markets around the world plunged earlier in this week as a slump in Shanghai shares fueled worries over China’s economic health, but some calm returned after Beijing rolled out strong policy easing steps late on Tuesday.
2) China stocks rose for the second day, with Shanghai Composite surging nearly 5 per cent. Also lifting the global market sentiment, Japan’s central bank governor Haruhiko Kuroda earlier this week said market players had become “too pessimistic” about China, and he expected its growth would likely remain at 6-7 per cent this year and next.
3) Wall Street rose sharply on Thursday following revised US gross domestic product data showing the economy grew faster than initially thought in the second quarter. The Dow Jones industrial average on Thursday scored its biggest two-day percentage gain since 2008. The Dow rose 2.3 per cent or 370 points, extending its two-day gain to 6.3 per cent.

4) Following the strong US data, other risk assets like oil also jumped sharply. On Thursday, US crude ending up $3.96, or 10.3 per cent, at $42.56 per barrel – its biggest one-day percentage gain since March 2009.

5) However, the strong US GDP has again raised the possibility of Federal Reserve raising its interest rate next month. A rate hike from the US could trigger outflows from emerging markets, leading to more turmoil in global financial markets.

6) Esther George, a Fed official, said in an interview that “we have to be careful … trying to decide today how we might react to” recent financial market volatility. Her comments followed New York Federal Reserve President William Dudley’s remarks on Wednesday that the prospect of a September rate hike “seems less compelling to me than it was a few weeks ago” in light of the global market volatility.

7) Coming back to Indian markets, analysts however say that unless selling pressure from foreign institutional investors abates, the gains in Indian markets may remain capped. Foreign institutional investors hold nearly 25 per cent of BSE 200 stocks.

8) Foreign investors sold Indian shares worth Rs 3,347 crore on Thursday. In the past seven sessions, they sold Indian shares worth nearly Rs 16,500 crore. In contrast, domestic investors bought stocks worth Rs 2,577 crore on Thursday. They have been big buyers of Indian stocks in the past few days, offering support to Sensex and Nifty.

9) Market analysts say Indian stocks may consolidate in the next few days. Market analyst Ambareesh Baliga said that investors who missed the recent dips to invest should wait for a possible consolidation to put in fresh money. “7800 to 8000 levels remain a good value to put in fresh money,” he said.

10) The rupee traded in a narrow range of 66.02 to 66.20 per dollar today. Yesterday, it had closed at 66.04.