Indian equity indices buckled under selling pressure for the second straight day on Friday as slowing growth and lack of buying triggers took a toll on investor sentiment.
Market mood was risk-averse a day after the RBI disappointed on the rate cut front and also projected slower growth for this fiscal, traders said. Additionally, concerns over the fiscal deficit and a weakening rupee weighed on bourses, they added.
After opening on a positive note, the 30-share BSE Sensex witnessed a continuous slide and went on to hit an intra-day low of 40,337.53. The index finally settled at 40,445.15, down 334.44 points or 0.82 per cent.
Likewise, the 50-share Nifty shed 96.90 points or 0.81 per cent to settle at 11,921.50.
On a weekly basis, the Sensex dropped 348.66 points or 0.85 per cent; while the Nifty lost 134.55 points or 1.11 per cent.
Yes Bank was the biggest laggard in the Sensex pack on Friday, diving 9.82 per cent after Moody’s Investors Service downgraded the private sector lender’s ratings.
Other top losers were SBI, IndusInd Bank, Tata Motors, Mahindra and Mahindra and HDFC, tumbling up to 4.89 per cent.
On the other hand, Kotak Bank, Tata Steel, RIL, Asian Paints, TCS, Infosys and HDFC Bank closed with gains.
Of the 30 Sensex stocks, 23 closed in the red and seven finished with gains.
“Clouds over economic growth outlook and premium valuation influenced investors to stay away from rate-sensitive stocks. While rising 10-year yield due to spike in inflation and potential slip in fiscal path may result in near term consolidation in the market,” said Vinod Nair, head of research at Geojit Financial Services.
Sectorally, BSE auto index suffered the most by losing over 1.80 per cent, followed by finance, utilities, realty and bankex.
Telecom index was the sole gainer on the chart.
Vodafone Idea shares crashed about 9 per cent on Friday, spooked by company’s chairman Kumar Mangalam Birla statement that the telco “will have to shut shop” in the absence of government relief.
Shares of oil and gas companies fell amid reports that OPEC and other major producers will announce fresh output cuts.
ONGC fell 1.39 per cent, HPCL 0.47 per cent, IOCL 0.23 per cent and BPCL 0.20 per cent. Shares of Petronet LNG saw a dip of 0.17 per cent to Rs 271.65.
According to reports, OPEC and Russia along with other producers agreed to one of the biggest output cuts to prevent oversupply in the market.
Crude benchmark Brent Futures rose 0.30 per cent to trade at USD 63.58 per barrel.
The Indian rupee appreciated 9 paise to close at 71.20 against the US dollar on Friday. At the interbank foreign exchange market, the local unit opened at 71.30 and shuttled between a high of 71.19 and a low of 71.43. It finally finished at 71.20, lower by 9 paise. The domestic unit had settled at 71.29 against the US dollar on Thursday.
In contrast to the Indian market, optimism over the China-US trade talks kept Asian markets buoyant on Friday, with investors betting the two will eventually sign a partial deal, though they remain nervous as next week’s deadline for fresh tariffs draws closer.
Sentiment across trading floors has ebbed and flowed through the week as observers try to gauge the state of play in the long-running negotiations, with both sides making positive, then negative comments on the outlook.
The latest soundings allowed investors to return to the buying that has helped propel global markets for weeks, sending Wall Street to multiple records.
Hong Kong climbed more than one per cent, Shanghai and Sydney added 0.4 per cent, while Tokyo, Singapore, Wellington, Manila, Bangkok and Jakarta each gained 0.2 per cent.
Seoul jumped more than one per cent and Taipei edged up 0.1 per cent but Mumbai slipped 0.4 per cent.
In early trade, London and Frankfurt each rose 0.3 per cent, while Paris gained 0.2 per cent.
“It’s been rather a strange week for global equity markets,” said Michael Hewson at CMC Markets UK.
“Moving from an expectation that we could well see some movement on trade between the US and China in the next couple of weeks, to the prospect that any solution may well not happen until after the next presidential election. As a result of these mixed signals investors appear to be taking a more cautious view as to what may happen next,” he added.
