Weekly Review: Sensex, Nifty fall nearly 2% on weak rupee, US rate hike concerns

By: | Published: December 5, 2015 8:36 AM

Benchmark indices ended the week nearly 2 per cent down on account of Chennai rains, weak rupee, some selling pressure by foreign institutional investors and concerns over US interest rate hike, due later this month.

Sensex, Nifty, Stock market outlookMarket regultor, Sebi proposed in the investors’ interest that if the newly-listed company does not utilise its IPO proceeds in the manner stated in the offer document, then investors have a right to exit with no loss on their shoulders. (Reuters)

Benchmark indices ended the week nearly 2 per cent down on account of Chennai rains, weak rupee, some selling pressure by foreign institutional investors and concerns over US interest rate hike, due later this month. This week, Sensex and Nifty slid 490.09 points and 160.80 points to 25,638.11 and 7,781.90 on December 4 from 26,128.20 and 7,942.70 on November 27, respectively.

The week saw some buying in metal, healthcare and real estate stocks while selling was visible in banking, auto and consumer durables stocks. Among the sectoral indices on the BSE (formerly known as Bombay Stock Exchnge), the BSE Bankex tumbled the most — 2.68 per cent at 19,325.36 on December 4 from 19,857.73 on November 27, it was followed by BSE Auto index (down 2.12 per cent at 18,480.13), BSE Consumer Durables index (down 1.83 per cent to 12,112.48) and BSE TECk (down 1.66 per cent at 5,810.54). On the other hand, BSE Metal index, BSE Healthcare index and BSE Realty index gained 1.91 per cent, 0.85 per cent and 0.35 per cent, respectively, during the period.

During the week, Tata Steel (up 4.02 per cent), Dr Reddy’s Labs (up 2.97 per cent), Sun Pharma (up 2.03 per cent), IndusInd Bank (up 2.03 per cent) and Hindalco Industries (up 2.03 per cent) jumped the most in the Nifty pack.
Share price of Punjab National Bank, Bank of Baroda and Bharti Airtel slid 6.93 per cent, 6.44 per cent and 5.84 per cent, respectively, during the week.

Gaurav Jain, director, Hem Securities, said, “Status quo monetary policy by RBI, US Fed Chairman Janet Yellen speech indicating a certain hike in its meet during mid of the current month, status quo policy of European Central Bank, weak HSBC Manufacturing PMI of India, continued selling pressure by foreign portfolio investors and weakening of rupee against dollar has created havor for the Indian benchmarks during the week.”

According to the website of NSDL, foreign institutional investors or foreign portfolio investors remained net sellers in the equity market segment as they sold shares of worth Rs 2,820 crore this week.

Rupee fell 0.13 per cent to 66.84 levels on December 4 from 66.75 levels on November 27. Brijesh Ved, senior portfolio manager, equities, BNP Paribas Mutual Fund, said, “The Indian rupee slipped due to continued selling by FIIs in stock and debt markets.”

Among major events, the Reserve Bank of India kept all key policy rates unchanged in its fifth bi-monthly monetary policy review. Market regultor, Sebi proposed in the investors’ interest that if the newly-listed company does not utilise its IPO proceeds in the manner stated in the offer document, then investors have a right to exit with no loss on their shoulders.

Shares of companies based out of Chennai took a sharp hit as heavy flooding in the region paralysed operations across many companies. Chennai is a major auto manufacturing and IT outsourcing hub for companies including TVS Motors, Infosys, TCS and Cognizant Technology. Prakash Diwan, market expert, prakashdiwan.in said, “The rains in Chennai are likely to adversely impact output of auto companies in the month of December 2015.

In a stock specific development, Bharti Airtel rattled the entire telecom industry by announcing its plan to invest Rs 60,000 crore over a three year time span potentially indicating a tectonic shift in the industry dynamics and at the same time throwing questions in the minds of the investors of how the telecom sector can thrive with so much investment and intense competition, and Reliance Jio just waiting at the door steps.

Market movement in near term will depend on domestic macroeconomic numbers i.e. industrial production (IIP) data for October 2015, developments in winter session of the parliament especially its stance on GST Bill, outcome of OPEC meet, interest of foreign portfolio investors, trend in commodity prices globally and rupee-dollar movement.
On GST, Jimeet Modi, CEO, SAMCO Securities, said, “GST expectations are getting louder and louder with each passing day. The difference of opinion between the parties is converging and it is expected that the bill will be cleared in the winter session of the parliament. Market will go into wait and watch mode prior to the FED meeting outcome causing the market to oscillate in a narrow range.”

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