Bucking the positive global trend and the encouraging index of industrial production (IIP) figures, the Indian bourses continued to witness selling pressure for the fourth consecutive day on Friday. Sentiments mainly took a hit after bluechip shares like Reliance Industries, Infosys and ICICI ended in the red, dealers said.
On Friday, key equity indices, after opening with a positive gap, continued to plunge throughout the day. The Sensex of the Bombay Stock Exchange (BSE), shed more than 500 points in intraday trade but managed to close at 14K, down 323.48 points or 2.26%. The wider Nifty of the National Stock Exchange (NSE) ended with a loss of 61.85 points or 1.44% at 4,228.45 points.
Though selling pressure was witnessed across-the-board leaving all sectoral indices to end in the red, it was the heavyweights which took a severe beating. Reliance Industries continued to witness a free fall on Friday, hitting a new 52-week low of Rs 1,918.
?Earnings downgrades for RIL coupled with fall in crude in the last one month is likely to hit the refining margins of the company. Stocks like RIL, Infosys, ICICI represent their sectors. So when these stocks fall, investor sentiments also fall,? said Jignesh Desai, head, institutional business, SBI Caps.
Even IT and tech stocks, which enjoyed some rally since the beginning of the year on the back of depreciating rupee, took a beating on Friday and prominent amongst them were Infosys and TCS. Infosys fell by 6% to end the day at Rs1,644 while TCS was down 3.34% to close at Rs 808.
Rajiv Mehta, an IT analyst at India Infoline, said, ?Currencies like the pound and others are falling against the dollar and the adverse movement of these currencies against the dollar is creating a cross-currency headwind which would have some impact on their dollar numbers. It is likely to hit the earnings growth of IT companies. There is no denial that there is a temporary slowdown in the IT industry but long term fundamentals still look good subject to developments in the US and UK.?
On a weekly basis, the Sensex which gained close to 500 points on Monday, pared all its gains to end the week with a loss of 480 points or 3.33%. The Nifty lost 123 points or 2.85% in the last week. Foreign institutional investors withdrew around Rs 5,000 crore in the last one week from the Indian bourses.