Benchmark indices retreated in 4 out of 5 sessions this week, with Sensex losing 1.8%
Benchmark indices closed more than 1% lower on Friday as the retail inflation data dampened hopes of a rate cut by the Reserve Bank of India (RBI) in April and stoked fears of a Fed rate hike in June, putting emerging market currencies under pressure. During the week, the BSE benchmark Sensex ended 1.18% lower.
“Currently, there are no key triggers for the market. While indices opened higher amid optimism from the passage of the insurance bill in the Rajya Sabha, it doesn’t come across as a great surprise as it was a long-pending issue. The retail inflation data has led to concerns that RBI may not cut the interest rates in its April monetary policy. Further, the fear of a rate-hike by the US Fed in its June Federal Open Market Committee (FOMC) has put currency markets under pressure,” said Andrew Holland, CEO at Ambit Investment Advisors.
As per data released on Thursday, the consumer price inflation (CPI) for the month of February stood at 5.7% as compared to 5.1% seen in the month of January.
On Friday, foreign institutional investors (FIIs) bought $10 million worth of shares, while domestic institutional investors sold $11.54 million worth of shares. In YTD, FIIs have bought more than $5.3 billion worth of shares.
After a gap-up opening of 204.52 points due to the passage of the insurance bill in the Rajya Sabha, the 30-share Sensex closed 427.11 points or 1.48% lower at 28,503.3 points. NSE’s Nifty closed 1.5% or 128.25 points lower at 8,647.75 points after opening 68.05 points higher.
The rupee closed 0.7% lower to 62.96 against the dollar. Among emerging market currencies, the Taiwan Dollar (-0.2%), Singapore Dollar (-0.6%), South Korea Won (-0.2%), South Africa Rand (-1.7%) and the Indonesian Rupiah (-0.17%) were under pressure amid fear of a US Fed rate hike.
The market fall was led by declines in Bhel (-3.4%), Larsen & Toubro (-3.1%) and Bajaj-Auto (-2.6%). However, with insurance bill getting passed in the Rajya Sabha, insurance stocks gained 3-6% in intra-day trade before closing in the red. Reliance Capital (-3.1%), Exide Industries (-2.1%), Religare Enterprises (-0.8%) and Max India (-4.1%) ended lower.
It was a dismal week for the markets with Sensex retreating in 4 out of 5 sessions. On Monday, Sensex lost more than 2% as unemployment rate in the month of February fell to its lowest level in six-and-a-half years.
Back home, 27 of the 30 Sensex ended in the red on Friday. In the broader market, the breadth was weak with 2,022 stocks ending lower on the BSE as against 853 advances. All the 12 sectoral indices ended in the red. The BSE Capital Goods (-2.6%), BSE FMCG (-1.9%) and BSE Bankex (-1.9%) ended lower.
The NSE cash turnover on Friday stood at R20,173.58 crore, while the turnover in the F&O segment stood at R3.16 lakh crore.