Stock: Equities found lack of direction and were left with little to show in a highly volatile trading week after RBI poured cold water on early market optimism concerning an interest rate cut even as global political uncertainty took centre stage in major economies. Though it was an action-packed week, Indian markets showed much resilient and defended world pressure in the midst of an unexpected outcome for UK elections despite global uneasiness. Both the flagship indices – BSE-Sensex and NSE-Nifty had closed at record highs on Monday. It also conquered new historic peaks ahead of the much awaited central bank policy outcome before retreating.
Breaking its spectacular record-setting fourth straight week rally, benchmark Sensex settled with a modest loss of 11.23 points at 31,262.06 after climbing a new peak of 31,430. In contrast, the broader Nifty ended at a record high of 9,668.25 with a modest gain of 14.75 points after briefly kissing the 9,700 milestone for the first time, stretching its powerful bull-run. Trading got off to a fairly buoyant start, induced by the country’s GST preparedness and investors’ focus on banking counters ahead of the RBI policy as well as better monsoon forecast, propelling key indices to new heights.
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However, markets developed cold feet the next very day after briefly scaling historic peaks as traders adopted a defensive stance, triggering heavy profit-taking. Investors’ sentiment on Tuesday broadly titled towards political risks looming over US and UK elections alongwith ex-FBI Director’s testimony on Trump conversations. Additionally, the gulf diplomatic crisis following the Arab countries’ decisions led by Saudi Arabia to sever all ties with the tiny-yet-wealthy peninsular nation of Qatar over Islamist support, added some pressure on trading front too.
Bourses staged a dramatic recovery on Wednesday post RBI policy outcome, though the RBI kept the repo rate steady citing risks to inflation, but raised lending capacity of banks to support economic growth. Despite knee-jerk reaction to policy outcome, overall sentiment remained shaky due to geopolitical headlines. The monetary policy committee also lowered the inflation outlook and slashed GDP growth for the current fiscal lower at 7.3 per cent and saying that rush for farm loan waivers may have inflationary spillovers.
The fag-end trading day witnessed some good amount of buying in frontline heavyweights and short-covering bounces, helping key indices to trim losses, but it was not enough to stop the bourses from recording their first fall in five weeks. The beleaguered trading week saw heavy unwinding in technology counters predominantly impacted by near term revenue growth worries against the backdrop of stemming developments from the recent US presidential election and Trump’s fierce protectionist rhetoric . Additionally, the media reports suggesting that the Infosys founders are looking to offload their stake in the company further dampened sentiment .
FMCG, oil&gas, power, capital goods and PSU were the other major laggards. However, consumer durable, realty and financials largely enjoyed a better week, while healthcare and metal sector bounced back on a general feeling that it had been oversold. Financial received a boost from higher banking stocks on expectations of interest rate cuts.
The BSE 30-share Sensex opened higher at 31,274.74 and touched a all time-high of 31,430.32 and a low of 31,087.28, before concluding at 31,262.06, revealing a small loss of 11.23, or 0.04 per cent. Similarly, the broader NSE 50-share Nifty also followed the suit and opened higher at 9,656.30 and touched a fresh peak of 9,709.30 and a low of 9,608.15 before ending at 9,668.25, showing a modest gain of 14.75 points, or 0.15 per cent. Meanwhile, foreign portfolio investors (FPIs) and foreign institutional investors (FIIs) sold shares worth Rs 1,184.37 crore during the week, as per Sebi’s record including the provisional figure of June 09.
Broader market depicted strength,the S&P BSE Small-Cap Index rose 238.00 pts or 1.55 percent to settle at 15,549.17 and the S&P BSE Mid-Cap index gained 73.88 pts or 0.50 pct to finish at 14,875.36. Both these indices outperformed the Sensex. Among sectoral and industry indices, IT dipped by 1.51 per cent followed by FMCG 1.49 per cent, Teck 1.19 per cent, Power 1.10 per cent and PSU 0.96 per cent. However, IPO rose by 3.14 percent followed by Consumer durable 2.83 percent, Metal 2.67 percent, Healthcare 2.54 percent, Realty 2.36 percent, Banking 1.21 percent and Auto 0.82 per cent.
Among the 30-share Sensex pack, 16 stocks rose and remaining 14 stocks fell during the week. Index gainers were, Maruti 4.73 pct, Cipla 4.04 pct, Dr Reddy 3.03 pct, Tata Steel 2.99 pct, HDFC 2.16 pct, Sun Pharma 1.94 pct, HDFC Bank 1.90 pct, ICICI Bank 1.41 pct, Axis Bank 1.10 pct, Reliance 0.81 pct, BajajAuto 0.75 pct and Adaniport 0.71 pct. While, GAIL dropped by 5.31 pct followed by ITC 4.06 pct, Wipro 2.75 pct, NTPC 2.74 pct, ONGC 2.73 pct, Coal India 2.66 pct, Tata Motors 2.37 pct, Infosys 2.15 pct, TCS 2.01 pct, BhartiAirtel 1.62 pct, HeroMotoco 1.58 pct and Asian Paints 0.84 per cent. The total turnover during the week on BSE rose to Rs 20,950.40 crs as against last weekend’s level of Rs 17,834.74 crores, While NSE fell to 1,10,995.07 compared to Rs 1,35,278.32 crs previously.
Bullion: Gold prices reversed its one week down-trend following sharp investment offtake and increase in buying interest from stockists and jewellery buyers, hurt by a sluggish overseas trend here at the bullion market. Traders said besides a weak trend overseas, the yellow metal staged a strong comeback during the weeks trade. Elsewhere, silver also rebounded sharply to close above the significant Rs 40,000 mark due, to heavy speculative buying coupled with higher industrial demand.
In worldwide trade, Gold prices fell to notch a third-straight decline and their first weekly drop in more than a month, despite a market fraught with the type of political drama that would ordinarily have offered a boost to precious metals. The precious metal fell for a third day, meanwhile, after British elections failed to deliver a clear majority for Prime Minister Theresa May, knocking the pound sharply lower and helping lift the dollar index to its highest since late May. The yellow metal saw a weekly decline of 0.7 per cent, which was the first such loss in five weeks, while the white-metal fell by 1.7 per cent.
In the New York Comex trade, gold for August delivery declined to USD 1,271.40 an ounce compared to last Friday’s August close of USD 1,280.20 and silver for July contract fell to end at USD 17.223 an ounce from USD 17.525. On the domestic front, standard gold (99.5 purity) resumed higher at Rs 29,110 per 10 grams from last Friday’s closing level of Rs 28,090 and rose further to Rs 29,345 before concluding at Rs 28,945, revealing a rise of Rs 175, or 0.60 per cent.
Pure gold (99.9 purity) also commenced positive at Rs 29,260 per 10 grams compared to preceding weekend level of Rs 28,920 and gained further to Rs 29,495 before ending at Rs 29,095, showing a gain of Rs 175, or 0.60 per cent. Silver ready (.999 fineness) opened higher at Rs 40,610 per kilogram from last Friday’s closing level of Rs 39,920 and rose further to Rs 40,940 before closing at Rs 40,085, revealing a rise of Rs 165, or 0.41 pct.