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Sensex snaps two-day run, tumbles 715 points on bearish global cues

Infosys, ICICI Bank, Reliance Industries, and HDFC Bank were the top contributors to the Sensex’s fall. While Infosys slid 9.3%, the HDFC twins declined over 7.2% each during the week.

Both the Sensex and Nifty ended lower for the second week in a row, dragged by declines in banking and IT counters.
Both the Sensex and Nifty ended lower for the second week in a row, dragged by declines in banking and IT counters.

The benchmark indices snapped its two-day run on Friday and ended the week lower after the US Federal Reserve chairman Jereme Powell hinted about a 50 basis points (bps) interest rate hike to tame inflation in the upcoming month itself. Both the Sensex and Nifty ended lower for the second week in a row, dragged by declines in banking and IT counters.

After opening negative, the Sensex extended losses and ended lower by 714.53 points or 1.23% at 57,197.15, while the Nifty-50 declined 220.65 points or 1.27% to close at 17,171.95. Infosys, ICICI Bank, Reliance Industries, and HDFC Bank were the top contributors to the Sensex’s fall. While Infosys slid 9.3%, the HDFC twins declined over 7.2% each during the week.

Nifty snapped a two-day winning streak, impacted by the hint by Fed Chair Powell about an imminent rate hike of 50 bps in June. Markets in India remained torn between hopes for an early end to the geopolitical uncertainty and fears of faster monetary tightening. On daily charts, Nifty fell and filled the upgap made on the previous day, thus negating the bullishness. On weekly charts, the Nifty fell for the second week in a row, falling 1.74%,” said Deepak Jasani, head of retail research, HDFC Securities.

Foreign portfolio investors continued to withdraw money from the Indian market. On Friday, they sold shares worth $321.86 million, against local investors’ purchase of $209.50 million, provisional data on the exchanges showed. With Friday’s sales, FPIs have sold Indian shares in every session since April 6, having been sold equities to the tune of $3.72 billion during the same period.

Alongside global factors, mixed numbers from initial Q4 results and outflows from foreign investors further dampened the spirit during the week, said analysts. Siddhartha Khemka, head – retail research, Motilal Oswal Financial Services, said: “Global cues like hawkish Fed commentary, rising inflation and bond yields, slowing economic growth, prolonged war in Ukraine and volatile crude prices are keeping markets uncertain. Continuous selling by FIIs and weak results by few heavyweights has further added pressure to the market.”

Elsewhere in Asia, too, markets mostly ended in the red on Friday post Powell’s hawkish comments. Japan’s Nikkei 225 ended lower by 1.6%, while Hang Seng declined 0.2%. On the other hand, the Shanghai Composite ended marginally higher by 0.23% on Friday.

Back home, all major sectors ended in the red, with the Nifty Bank falling over 2% in the session. Overall, out of the 3,531 stocks traded on the BSE, 2,030 declined.

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