Indian share markets closed down on Thursday on profit booking and tracking European trends with Brexit fears resurfacing in the United Kingdom.
Both the share benchmarks Sensex and Nifty opened up tracking firm Asian and US markets after US President Donald Trump outlined fiscal stimulus to spur growth in the world’ largest economy even as dollar rose to seven-week high on expectation the Federal Reserve will hike interest rates in March policy review.
Sensex breached the 29,000 and while Nifty came close to 9,000-level in intra-day trade. However, the indices slipped into red as investors booked profits and as European shares tumbled after UK Prime Minister Theresa May vowed to trigger Article 50 on March 15 for exiting European Union despite an overwhelming defeat at the House of Lords. After the news, European shares slipped into red.
Sensex closed down 144.7 points or 0.5% at 28,839.79 while Nifty was down 0.5% at 8,899.75.
Auto stocks were up after the companies overcame the demonetisation impact and posted robust sales growth in February. Tata Motors was up 2.7% while Bajaj Auto gained 2.1% and Hero MotoCorp 1.4%.
After the US benchmark Dow Jones Industrial Average touched all-time high of 21,000 on Wednesday, Asian shares were up with Nikkei ending up 0.9% while Kospi gained 0.5%. Hang Seng was down 0.2% and Shanghai 0.5%.
The dollar hit seven-week high on signals from Fed officials of a hike in interest rates. The dollar index, which measures the greenback against a basket of six major currencies, touched 101.87 after hitting 101.97 on Wednesday, the highest since January 11.
On Wednesday, Federal Reserve governor Lael Brainard said an improving global economy and a solid US recovery mean it will be “appropriate soon” for the Fed to raise rates.
On Tuesday, two other Fed officials William Dudley and John Williams indicated they are worried about waiting too long in the face of pending economic stimulus from Trump.