The headline indices Sensex and Nifty registered their worst weekly fall in 5 months amid rising concerns of a slowdown in the economy.
The headline indices Sensex and Nifty registered their worst weekly fall in 5 months amid rising concerns of a slowdown in the economy. The Sensex and Nifty shed slipped more than 3% each in the week ended October 4th, even as RBI rate cut on Friday failed to uplift sentiments. Equity benchmark Sensex plummeted 434 points to close at 37,6723.31 on Friday, dragged by heavy losses in banking stocks after the RBI slashed the country’s economic growth outlook for this fiscal. Notably, the RBI slashed repo rate for the fifth time in a row. The RBI cut repo rate by 25 bps to 5.15% on Friday. Further, the RBI’s stance remains accommodative. The broader Nifty plunged 139.25 points, or 1.23% to close at 11,174.75.
Shares of IndusInd Bank (14.55%), Yes Bank (13.54%), Zee Entertainment (13.42%), SBI (11.11%) and Grasim (9.99%) were the biggest losers in the Nifty pack. BPCL (9.74%), IOC (3.78%), HCL Tech (3.65%), ITC (1.7%) and M&M (1.65%) were the biggest Nifty gainers in the week. Top laggards in the Sensex pack included Kotak Bank, ICICI Bank, HDFC Bank, Tata Motors, L&T, SBI, Tata Steel and Axis Bank, which plunged up to 3.46 per cent.
Shares of TCS, Infosys, ONGC, Tech Mahindra, IndusInd Bank and NTPC were the biggest gainers, jumping up to 1.03 per cent. The RBI on Friday sharply cut its economic growth projection for this fiscal to 6.1% from 6.9% earlier.
Taking stock of the volatile session in the stock markets, Naveen Kulkarni, Head of Research at Reliance Securities said that the rate cut of 25 bps by the RBI has not enthused the market because it was building in a higher reduction. “The RBI has also cut its GDP forecast for the year significantly, by 800 bps to 6.1%. While the stance maintained by the RBI is mindful of the structural slowdown in the economy, the market feels a greater push was needed,” he said.
According to Shrikant S. Chouhan, Senior Vice-President, Equity Technical Research, Kotak Securities, today’s market fall was mainly because of RBI slashing FY20’s GDP growth target to 6.1% from its earlier forecast of 6.90% on the back of weakening domestic demand conditions. “On the higher side, Nifty would face hurdles at 11,260, which is resistance of 200 days SMA, commonly followed by major participants of the market,” he added.