Despite a marginal recovery on Friday, the Sensex and Nifty registered their second biggest weekly fall in since January. Notably, the Sensex ended 100 points higher at 37,118.22 while the Nifty ended 18 points higher at 10,997.35. The Nifty turned negative for the calendar year intra-day, but a recovery in the last hour helped the index to close in the green. On weekly basis, this was a 5th consecutive weekly negative close for the market, where Nifty closed 2.52% lower. In the week Sensex declined 2.1% this on the back of weak domestic and global cues.
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Sharing major reasons that led to the currently weak sentiments, Sanjeev Zarbade, VP PCG Research, Kotak Securities said that commentary of the US Federal Reserve on the future rate cut, weak underlying trends in quarterly results, slump in automobile sales went the major dampeners. “Renewed concerns on US trade dispute affected global sentiments and aggravated the selloff. FPIs bought $149 million (outflows of US$1.9 billion in July) over the past five trading sessions while DIIs bought $1 billion,” Zarbade added.
According to the expert, the stock market investors will keenly track the the major event of RBI monetary policy meet scheduled for next week. Further, markets would continue to move depending upon the earnings announcements, macro-economic data (Inflation and IIP) and global cues, he said.
While the Nifty has shed more than 2.5% in the week, the biggest gainers were TCS (4.56%), Bharti Airtel (2.58%), Asian Paints (1.23%), HCL Tech (0.90%) and HUL (0.39%). The top 5 biggest losers include IndiaBulls Housing Finance (21.57% down), Zee Entertainment (15.45% down), Vedanta (12.86% down), Tata Motors (11.18% down), Grasim (11.08% down). Next week, The RBI MPC will meet for the August policy in the backdrop of weak economic growth increasingly becoming a bigger concern even as the inflation trajectory remains broadly in line with its expectations.
According to Suvodeep Rakshit, VP and Senior Economist at Kotak Institutional Equities, since the last policy meeting high frequency indicators have signalled a sharper decline in activity which will weigh on the policy meet discussions. “While the RBI’s inflation estimates of 3-3.1% in 1HFY20 and 3.4-3.7% in 2HFY20 are unlikely to breached by a significant margin, the near term outlook on growth (6.4-6.7% in 1HFY20) will likely see substantial downside risks,” Rakshit said in a note.