Weekly Review: Sensex, Nifty end flat on Asian cues

By: | Updated: January 23, 2016 10:01 AM

In the past five trading sessions, the barometer index Sensex plunged 19.38 points to 24,435.66, while Nifty 50 index dipped 15.35 points to settle the week at 7,422.45.

sensexIn the past five trading sessions, the barometer index Sensex plunged 19.38 points to 24,435.66, while Nifty 50 index dipped 15.35 points to settle the week at 7,422.45. (Reuters)

Domestic equity markets ended the week with marginal losses on account of selling in Asian indices after the International Monetary Fund (IMF) slashed global growth forecast. Continuous outflow of money by foreign institutional investors, falling crude oil prices, dismal batch of Q3 earnings and soft rupee also dampened the market sentiments for the week ended January 22. This was the third consecutive weekly fall for benchmark indices BSE Sensex and NSE Nifty.

In the past five trading sessions, the barometer index Sensex plunged 19.38 points to 24,435.66, while Nifty 50 index dipped 15.35 points to settle the week at 7,422.45.

Around 23 stocks ended the week in red in the 50-share index with shares of Vedanta tanked the most —10.78 per cent, followed by Reliance Industries (down 6.45 per cent), Cairn India (down 5.73 per cent), BPCL (down 5.31 per cent) and Coal India (down 5.23 per cent). On the other hand, Axis Bank and GAIL surged 13.56 per cent and 9.13 per cent during the week under review.

Gaurav Jain, director, Hem Securities, said, “Continued slumping of crude oil prices to multi-year lows, global sell-off triggered by IMF slashing its global growth forecasts for the third time in less than a year, sharp depreciation of Indian rupee and weak Q3 earnings of India Inc spooked the sentiment of the street.”

During the week, major indices fell over 2 per cent in the first four trading sessions. However, markets wiped off almost all their losses of the week on Friday due to heavy buying in Asian markets. “Lower level buying, short covering, dovish remarks from the European Central Bank (ECB) and positive global cues supported the indices in the week gone by. Thus, shutting the week on a flat note,” said Jain.

Sectorwise, the BSE Oil & Gas index, BSE Realty index and BSE FMCG index slid 3.45 per cent, 2.74 per cent and 2.72 per cent during the week ended January 22. The BSE Bankex and BSE Capital Goods index gained 2.25 per cent and 1.15 per cent respectively during the period.

Among the major event of the week, Reliance Industries on January 19 reported its highest-ever quarterly net profit of Rs 7,290 crore for the three months ended December on refinery margins spiking to seven-year high. Net profit of Rs 7,290 crore in October-December was 38.7 per cent higher than Rs 5,256 crore in the same period a year ago.

Foreign institutional investors sold shares worth Rs 6479.08 crore (net) in the past five trading sessions. Rupee fell 0.47 per cent to 67.74 on January 22 from 67.43 on January 15 last week.

On the macro front, latest data showed that India’s merchandise exports declined for the thirteenth consecutive month in December, 2015. For the month of December, 2015, exports fell by 14.7 year-on-year (yoy) to $22.3 billion while imports fell 3.9 per cent yoy to $33.96 billion. The trade deficit widened by 27.1 per cent yoy to $11.7 billion, for the same period. While the trend in falling exports is in tandem with the trade situation in other major world economies, it is particularly disconcerting for emerging market economies like India.

Rumblings in China continued to send jitters across the globe. The Chinese economy grew by 6.8 per cent in the fourth quarter of the year, easing from a reading of 6.9 per cent in the third quarter. The world’s second largest economy grew at its weakest clip since the first quarter of 2009, when growth tumbled to 6.2 per cent. The country’s economic growth rate dropped to a 25-year-low of 6.9 per cent in 2015, down from the 7.3 per cent growth it witnessed in 2014. China is the world’s largest consumer of steel, copper and aluminum and a slowdown in Chinese demand is going to have far reaching consequences on global growth rates.

For upcoming trading sessions, Anand James, co-head technical research desk, Geojit BNP Paribas, said, “The week ahead would see FOMC meeting taking centre stage, with markets keenly weighing the prospects of the Fed continuing with the rate hike trajectory in the backdrop of growth worries across globe. Sustainability in recovery of oil prices would also be closely followed, both of which could set an ideal platform for markets to react to the RBI monetary policy decision scheduled for the first week of February.”

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