The markets fell more than 0.3% on Friday as foreign institutional investors (FIIs) turned sellers after a 21-day buying spree.
On Friday, FIIs sold shares worth $60 million, while domestic institutional investors (DIIs) bought shares worth $60 million, according to the provisional BSE data. Before Friday, FIIs were net buyers in each of the last 21 sessions, with their purchases totalling up to $4.1 billion. In calendar year 2014, FIIs had bought shares worth $4.7 billion.
On Friday, the 30-share BSE Sensex ended lower by 86.37 points or 0.38% to 22,628.96 points, while the broader 50-share Nifty declined 20.10 points or 0.30% to close at 6,776.30 points. India?s trade deficit in March widened to $10.51 billion, highest since October 2013.
Analysts feel the current market rally is based on misplaced belief that a new government holds key to economic recovery. ?Hopes are high among investors that the election can restart the investment cycle. Even if the electoral verdict is favourable, such misplaced optimism ignores the realities of the business cycle and overestimates the powers of the government. Only a fourth of investment projects under implementation are stuck with the Centre, the rest are constrained by overcapacity, balance sheets, or state governments,? Credit Suisse analysts said in a recent report.
The market fall was led by declines in Mahindra & Mahindra and Tata Motors as each scrip ended 1.75% lower. As per Siam data, Mahindra & Mahindra?s passenger vehicle sales in FY14 were down 18.14% to 2,54,344 units, while Tata Motors sales figure were down 36.77% to 1,98,812 units for FY14. RIL shares ended 1.65% lower at R952.85.
It was a mixed week, with the benchmark indices retreating for two out of the four sessions. Sensex ended higher by 1.2%. On Wednesday, Sensex closed at its lifetime high of 22,702.34 points after the IMF projected a 5.4% growth for India in FY15. On Thursday, Sensex edged further higher to end at new highs of 22,715.33 points.
Most of the Asian markets edged lower on Friday. The Nikkei 225 fell over 2%. The Hang Seng (-0.79%), Kospi
(-0.56%), Straits Times (-0.17%), Shanghai Composite (-0.18%) and Taiwan Taiex (-0.45%) ended in the red. Jakarta Composite bucked the trend as it ended with gains of 1.07%.
Among the major European indices, the FTSE 100 (-1.28%), DAX (-1.91%) and CAC (-1.44%) were all trading in red at about 5.15 pm (IST).
Back home, about 19 of the 30 Sensex stocks ended in red on Friday. In the broader market, breadth was strong with 1,509 stocks trading on BSE ended higher compared with 1,297 declines. Most of the 12 BSE sectoral indices ended in the red. The BSE Oil & Gas ended 1.28% lower. BSE Capital Goods (-0.98%) and BSE Auto (-1.20%) were among the losers. Among the gainers, BSE IT (1.54%) and BSE Healthcare (0.91%) ended higher.
Markets would be eyeing IT major Infosys? Q4 results on Tuesday for further cues. The Infosys scrip ended 0.91% higher at R3,235.85 on Friday.