Sensex, Nifty end with small gains amid persistent worries
Stocks: Markets endured immense volatility and unprecedented sell-off sessions by FIIs during the week, leading the benchmark Sensex and the CNX Nifty to log their multi-months low though it managed to accrue gains on hectic short-coverings on April 8 on government’s move to soothe foreign investors’ tax worries and the rupee rebound.
The week commenced strong, with investors taking fresh positions at the beginning of May contract on heavy sell-off in April series and the passing of Finance Bill, 2015.
However, the momentum was short-lived as sentiment was overlapped by negativity on sustained selling by foreign portfolio investors (FPIs) on worries over Minimum Alternate Tax (MAT), weak corporate earnings, delay over passage of key reforms, including GST, and the Land Bill. Even Bollywood superstar Salman Khan’s conviction swayed entertainment-related stocks.
Selling pressure also built up due to sudden spurts in brent crude price, the rupee breaching the $64 mark to 20-month low and the global sell-off after US Federal Reserve chief Janet Yellen’s comment on equity valuations leading to global bond routs.
Investor worries abated after the government set up a high-level committee to look into the MAT issue, which turned the table in favour of bulls.
The BSE 30-share indicator resumed firm and hovered in a wide range of 27,603.71 and 26,423.99, before recovering to end with a small weekly rise of 94.08 points, or 0.35 per cent, to end at 27,105.39. In the last straight three weeks, it had crashed 1,868.07 points, or 6.47 per cent.
Similarly, the broader 50-issue CNX Nifty opened higher at 8,230.05 and moved in a breadth of 8,355.65 and 7,997.15 before settling the week better at 8,191.50, a modest gain of 10.00 points, or 0.12 per cent.
The market saw a bloodbath on Wednesday with the Sensex tanking 723 points — its biggest single-day fall since Narendra Modi government took over — on huge sell-off by FPIs on concerns over GST and other reforms.
Bouts of buying were seen in hammered stocks from FMCG, metal, tech, realty, oil & gas and auto while IT gained on rupee devaluations.
However, heavy off-loading was observed mainly in consumer durables, banking, power and capital goods.
Second-line shares, too, came under profit-booking by wary retail investors as BSE-Midcap and BSE-Smallcap indices closed down 1.73 per cent and 1.05 per cent, respectively, thus underperforming the Sensex.
Meanwhile, FPIs sold shares worth Rs 6,972.23 crore during the week, factoring in provisional data of May 8.
Jignesh Chaudhary, Head of Research, Veracity Broking Services, said, “The Indian equity markets had biggest fall on May 6 in the trading week. On the last trading day, the markets opened up with a huge upside gap and continued the momentum tracking the global cues. The main reason behind was the result of UK elections that gave David Cameron another shot to govern the country. There were some positive Q4 results by major blue chips such as HUL and Eicher Motors.”
He added: “Another reason was the softening crude price that fuelled the markets to grow. The coming week is going to be active for Indian and US economies. Trading technicals are suggesting a positive trend for both the markets.”
From the 30-share Sensex pack, 20 stocks finished in the green.
Bajaj Auto firmed up by 9.23 per cent, followed by Hindalco 7.71 per cent, HUL 5.31 per cent, Bharti Airtel 4.27 per cent, Vedanta 3.90 per cent, ONGC 3.63 per cent, RIL 3.13 per cent, BHEL 2.61 per cent, GAIL 2.48 per cent, M&M 3.16 per cent, TCS 2.50 per cent, Cipla 2.61 per cent, HDFC 1.36 per cent and ITC 1.80 per cent.
However, NTPC dropped by 5.49 per cent followed by Axis Bank 4.49 per cent, ICICI Bank 4.32 per cent, Tata Power 3.56 per cent, Maruti 3.41 per cent, SBI 3.05 per cent, BHEL 2.49 per cent, L&T 2.16 per cent and Hero MotoCorp 1.20 per cent.
Among the BSE sectoral indices, consumer durables tumbled by 4.02 per cent, bankex 3.05 per cent, power 3.02 per cent and consumer goods 1.97 per cent, while FMCG rose by 1.88 per cent, IT 1.62 per cent, metal 1.55 per cent, teck 1.55 per cent and realty 1.03 per cent.
The total turnover during the week at the BSE and NSE was up at Rs 15,935.18 crore and Rs 88,668.55 crore from previous week of Rs 13,354.24 crore and Rs 80,408.38 crore, respectively.
Forex: The Indian rupee dipped below the 64-mark to a 20-month low of 64.28 before recovering on the last day of the week to conclude at 63.94 against the American currency, still closing down by 52 paise on capital foreign funds outflows.
Fresh dollar demand from importers, mainly oil refiners, on the back of surge in brent crude oil prices too weighed on the rupee but a sharp fall in the greenback overseas capped the rupee’s losses.
Persistent foreign funds outflows, weighed down by persistent concerns over MAT issue and delay in passage of key tax reform bills in Parliament dragged down the rupee to 20-month lows. Foreign portfolio investors (FPIs) sold USD 1.03 billion during the first four days of the week as per the SEBI’s record.
The rupee resumed lower at 63.54 as against as against the last weekend’s level of 63.42 at the Interbank Foreign Exchange (Forex) market and dropped further to a 20-month low of 64.28 before ending the week at 63.94, logging a loss of 52 paise of 0.82 per cent.
This is the weakest level of Indian currency since September 10, 2013, when it was traded at 64.54 during the intra-day trade.
The benchmark BSE Sensex crashed by 722.77 points on May 6 — the second biggest fall in the current calender year after January 6, 2015 when it had plunged by 854.86 points or 3.07 per cent.
The Sensex recovered by 94.08 points or 0.35 per cent to end the week at 27,105.39.
In the New York, the dollar stuck in a range against most of its major rivals ahead of US jobs report, but sterling rallied to its highest in just over a week on expectations that British Prime Minister David Cameron’s Conservatives will stay in office.