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Market Review: Selling pressure breaks bull streak, dips indices

© Provided by The Rahnuma Daily

Profit booking after five-weeks of a bull streak pulled the key equities markets down during the just concluded weekly trade session.The key indices closed on a flat-to-negative note, as investors’ risk taking appetite got eroded due to a likely US interest rate hike.However, positive global cues, coupled with upbeat domestic macro-data and inflows of foreign funds arrested the downward spiral.The barometer 30-scrip Sensitive Index (Sensex) of the BSE edged lower by 60.52 points or 0.20 per cent to close at 28,832.45 points. The wider 51-scrip Nifty of the National Stock Exchange (NSE) slipped by 41.95 points or 0.47 per cent to 8,897.55 points.”Markets took a breather this week after five weeks of gains. Selling pressure emerged from the highs and curbed the gains seen during the week,” Deepak Jasani, Head – Retail Research, HDFC Securities, told IANS.”Caution ahead of assembly elections results next week and the US Federal Reserve policy meeting on March 14-15 resulted in weak undertone on Friday.”Investors’ sentiments were dented as macro-data released during the week under review pointed at a likely US interest rate hike during the upcoming US Federal Open Market Committee (FOMC) meet. A hike in the US interest rates can potentially drive away Foreign Portfolio Investors (FPIs) from emerging markets such as India.According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, the market sentiments were underpinned by a private survey which showed a marginal expansion in the domestic manufacturing sector during last month.Data released on March 1 showed that the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) — a composite indicator of manufacturing performance — rose marginally to 50.7 in February from 50.4 reported in January.”However, sentiments weakened with India Ratings and Research’s (Ind-Ra’s) estimates that aggregate fiscal deficit of Indian states will increase marginally to 3.3 per cent of gross domestic product (GDP) in FY18 from its forecast of 3.2 per cent for FY17,” Desai explained. “Traders remained cautious as non-food credit, comprising loans given by banks to agriculture and allied activities, industry, services and personal segments, grew at a slower clip of 3.5 per cent year-on-year in January 2017 as against 9.8 per cent in the year-ago period.”Market observers asserted that even though the equities indices failed to sustain at higher levels, the overall investors’ sentiments remained positive.”The domestic market continued its rally on hopes about the domestic economy and on positive global markets,” D.K. Aggarwal, Chairman and Managing Director, SMC Investments and Advisors, told IANS.”The recent data showed that the Gross Domestic Product (GDP) in the October-December quarter was much stronger than expected, and this cheered the market sentiment, erasing the fear of expected demonetisation effect.”India’s gross domestic product (GDP) for the third quarter of 2016-17 fiscal ended December, estimated at Rs 30.28 lakh crore, recorded a growth of seven per cent.On technical levels, Rakesh Tarway, Head of Research, Reliance Securities, explained that the Nifty had touched a new 52-week high, but failed to cross the sentimental 9,000-point level.”The Nifty witnessed sharp profit booking on Thursday with the broader markets turning weak in high beta sectors and stocks,” Tarway said. Commenting on the sector-specific movement, Jasani said: “Sectorally, the top gainers were metals, realty, capital goods and infrastructure indices. The top losers were cement, power, banking and telecom indices.”On the other hand, provisional figures from the stock exchanges showed that foreign institutional investors (FIIs) purchased stocks worth Rs 2,454.83 crore during the week, while domestic institutional investors (DIIs) divested scrip worth Rs 33.87 crore.Figures from the National Securities Depository (NSDL) disclosed that foreign portfolio investors (FPIs) bought equities worth Rs 1,503.76 crore, or $225.19 million, from February 27 to March 3.The Indian rupee closed with a minimal gain of two paise at 66.81 against a US dollar from last week’s close of 66.83.The top weekly Sensex gainers were: Reliance Industries (up 6.41 per cent at Rs 1,258.45), Hero MotoCorp (up 2.94 per cent at Rs 3,270.55), Hindustan Unilever (HUL) (up 2.19 per cent at Rs 877.15), Infosys (up 2.19 per cent at Rs 1,031.15) and Tata Steel (up 2.04 per cent at Rs 495.00).The losers were: NTPC (down 5.75 per cent at Rs 155.80), Power Grid (down 3.89 per cent at Rs 191.35), ICICI Bank (down 3.02 per cent at Rs 275.85), Bharti Airtel (down 2.85 per cent at Rs 355.60), and Axis Bank (down 2.81 per cent at Rs 512.80).

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