Domestic benchmark indices were in for a bumpy ride this week with many ups and down along the way. Starting the week equity markets tanked and lost 80% of the gains made in the previous week as investors lost Rs 5.8 lakh crore.
Domestic benchmark indices were in for a bumpy ride this week with many ups and down along the way. Starting the week equity markets tanked and lost 80% of the gains made in the previous week as investors lost Rs 5.8 lakh crore. From the closing levels of the previous week, S&P BSE Sensex tanked 2,000 points or 6% this week, while the 50-stock NSE Nifty dropped 500 points to end the week below the crucial level of 9,300. “Indian indices are still mirroring international markets and are unlikely to move on their own despite daily rise in the number of Covid-19 casualties. Volatility has significantly reduced with VIX across the world down by around 50% from its highs, thereby indicating slowdown in daily volatility of markets,” said Jimeet Modi, Founder & CEO, SAMCO Securities & StockNote.
Investors poorer by Rs 7 lakh crore: Investor wealth at the end of April stood at Rs 129 lakh crore. The first trading week of May did not go down well for the investors as BSE’s market capitalisation tanked by Rs 7 lakh crore to sit at Rs 122 lakh crore at the end of trading on May 8.
Reliance bags two more deals: Mukesh Ambani’s Reliance Industries bagged two more deals this week for an equity stake in its telecommunications arm Reliance Jio. On Monday private equity firm Silver Lake invested Rs 5,600 crore and on Friday another firm, Vista Equity Partners, invested Rs 11,000 crore in India’s fastest growing telecom network. If reports are to be believed, Ambani is not done with his plans to reduce his debt and is eyeing another stake sale to Saudi wealth fund.
Banking stocks fall: Marquee names from the banking industry saw their share price fall this week. ICICI Bank was down 3%; SBI Bank tanked 8.7% while even HDFC Bank slipped 1.3%. Financials danced between gains and losses during the week but ended the week down in the red. Kotak Bank slipped 6.2% while Axis Bank suffered the most loss as it tanked 9%. “A mixed trend was witnessed on the sectoral front wherein defensive viz. pharma and FMCG witnessed decent buying interest while pressure continued in banking, auto and metal space. Among the index majors, Reliance is currently playing a critical role in holding the benchmark while the banking pack is under tremendous pressure,” said Ajit Mishra, VP- Research, Religare Broking.
Expectation for the Week ahead: Domestic markets have been mirroring global peers so far and experts believe the following week too will not witness any substantial movement. “Market seems to be going nowhere as volatility is substantially reducing and is also unlikely to react to corporate numbers significantly. How consumers behave and react post the lockdown restrictions are lifted will be the most important data point for markets to decide their way forward. But nonetheless, this will only be visible in the next 2-3 months and till that time markets may not be in the mood to move substantially either way but may just gradually decline,” said Jimeet Modi. Expectations of a government stimulus will slip into next week as well.