Sensex ends week with 343-point loss
Mumbai: Stocks: Across-the-board selling triggered by a host of negative factors including announcement of macro economic data and concerns over the progress of monsoon kept the market under pressure for the third straight week as the BSE Sensex tumbled by 343 points in the week.
However, the market might get a push next week as the Index of Industrial Production (IIP) data surprisingly grew in April at an annual rate of 4.1 per cent to a two-month high, but the consumer price index (CPI) inflation rose to 5.1 per cent in May from 4.87 per cent in April.
Concerns that the US Fed will increase rates as early as September on better-than -expected jobs data, drought fears and RBI’s cautious stance on economic recovery continued to hit the sentiments.
Foreign investors turned cautious in anticipation of a inclusion of Chinese A shares in the MSCI Emerging Markets Index, which could see them move to Chinese markets, traders said.
After major index provider MSCI Inc decided against adding Chinese domestic stocks to its widely tracked emerging markets index for now, a major overhang was lifted from the Indian stock market. Such an inclusion would have resulted in a sharp increase in China’s weightage in the index, coming at an expense of other emerging markets including India.
The 30-share gauge, Sensex, began the week on a positive note to touch a high of 27,510.29 before plunging to a low of 26,307.07. Finally, it closed at an 8-month low of 26,425.30 — a level not seen since October 17, 2014 when it had finished at 26,108.53. In straight three weeks, it has crashed by 1,532.20 points or 5.48 per cent.
Similarly, the 50-share Nifty of the NSE also started higher and hovered in a range of 6,163.05 and 7,940.30 before concluding the week below 8,000-mark at 7,982.90, a fall of 131.80 points or 1.62 per cent .
In three weeks in a row, it has stumbled by 476.05 points or 5.63 per cent.
All-round selling was visible as the 12 sectoral indices closed in the red between 0.56 per cent and 3.98 per cent with realty, consumer durable, health care, metal, FMCG, Auto and IT segments taking the lead in the downslide.
Midcap and smallcap stocks too suffered heavily on profit booking by wary retail investors in the current uncertain scenario as their indices–the BSE-Smallcap and BSE-Midcap–dropped by 2.56 per cent and 2.24 per cent ,respectively, and underperformed at the sensex.
Meanwhile, on Thursday, RBI had said that Current Account Deficit fell sharply to its lowest level in a year at USD 1.3 billion or 0.2 per cent of GDP in the fourth quarter of 2014-15.
“Low visibility of capex recovery and slow credit growth are…reasons for investors lightening their overweight stance on Indian equities,” said Hitesh Agrawal – Head Research, Reliance Securities.
“The recent disappointing Q4 earnings season, coupled with the somber management commentaries, has cast a shadow over the extent of recovery possible in the current fiscal,” added Agrawal.
The market is also looking for the next triggers to decide on its future course of action, including the progress of monsoon and June earnings by key companies.
Besides, bleak chances of any further rate cut by the RBI, too put pressure on the market.
IT stocks were also at the receiving end on reports that the US Department of Labour has initiated probe against two Indian companies — TCS and Infosys — for H1-B visa violations.
Foreign Portfolio Investors (FPIs) continued their selling spree and pulled out Rs 3,158.05 crore during the week, including provisional data of June 12.
23 scrips out of the 30-share BSE ended weak while others finished higher. Major losers were Cipla 6.49 per cent , Tata Motors 4.74 per cent , Tata Steel 4.28 per cent , Sun Pharma 4.10 per cent , Wipro 3.31 per cent , Dr Reddy’s Lab 2.94 per cent , Hindalco 2.83 per cent , Hero MotoCorp 2.72 per cent , ITC 2.59 per cent , ONGC 2.58 per cent , NTPC 2.50 per cent , TCS 2.34 per cent , Infosys 1.76 per cent Coal India 2.26 per cent , HUL 1.94 per cent , L&T 1.37 per cent , RIL 1.87 per cent and SBI 1.49 per cent .
However, ICICI Bank rose by 3.99 per cent , Bajaj Auto 3.92 per cent , Tata Power by 2.83 per cent and GAIL India by 2.44 per cent .
Among the BSE sectoral indices, Realty plunged by 3.98 per cent , CD by 3.25 per cent , HC by 3.00 per cent , Metal by 2.88 per cent , FMCG by 2.24 per cent , Auto 2.21 per cent and IT 2.16 per cent.
The total turnover during the week on the BSE and the NSE dipped sharply to Rs 10,888.10 crore and Rs 67,957.63 crore from Rs 16,643.47 crore and Rs 82,255.38 crore, respectively, last weekend.
Forex: The rupee plunged by 31 paise to close the week at 64.06 against the American currency on fresh demand from banks and importers owing to a firm dollar in the overseas market amids foreign capital outflows.
Fall in the equity market in view of cautious approach of investors over concerns of a deficient monsoon for the second consecutive week also affected the rupee sentiments.
The Indian currency started lower at 64.05 a dollar from last weekend’s close of 63.75 at the Interbank Foreign Exchange (Forex) market and dropped further to a low of 64.1675 before concluding at 64.06, disclosing a loss of 31 paise or 0.49 per cent from its preceding weekend.
It hovered in a range of 63.7450 and 64.1675 during the week.
Foreign investors pulled out USD 388.81 million during the first four days of the week as per the SEBI’s record.
In the global market, the dollar traded higher against its rivals , as worries surrounding Greece continued to deepen, though some investors were headed to the sidelines ahead of next week’s US Federal Open Market Committee meeting.
Mr Pramit Brahmbhatt, Veracity Group CEO said,” Rupee ended lower following weak local equities”. Traders preferred to stay cautious in the unsure market.
The trading range for the spot dollar-rupee pair is expected to be within 63.60 to 64.40, he added.
Meanwhile, the Indian sensex continued to fall for the third consecutive week, tumbling by 343.19 points or 1.28 per cent during the current week.
In the forward market, the premium ended lower on receivings from exporters.
Forward dollar premium payable in November finished lower at 209.5-210.5 from last weekend’s level of 217-219 paise and far-forward contract maturing in May 2016 also closed down at 433.5-434.5 paise from 440.5-442.5 paise.
The RBI fixed the reference rate for the US dollar at 64.0301 and the euro at 71.8994 from preceding weekend’s level of 63.8955 and 71.8185, respectively.
The rupee tumbled further against the pound sterling to end the week at 99.28 from 97.66 previous weekend and also moved down further to 71.68 per euro from 71.62.
The domestic currency fell back against the Japanese to end at 51.79 per 100 yen from preceding weekend’s level of 51.13.