Market Review: US-China tensions, political anxieties dent equity indices

Last Updated: Sun, Dec 09, 2018 11:41 hrs
Sensex

Mumbai: The Indian equity indices dipped over concerns of slowing world economy and fears on a resurgence of US-China trade tensions after the arrest of Huawei's Global CFO over alleged violation of US sanctions on Iran.

Additionally, outflow of foreign funds along with uncertainty over the outcome of Assembly elections in five states also weighed on investor sentiments.

Consequently, the S&P BSE Sensex lost 521.05 points, or 1.43 per cent, to close at 35,673.25, whereas the 50-share NSE Nifty declined 187.05 points, or 1.71 per cent, to settle at 10,693.70 points.

"After rallying for six consecutive sessions, domestic markets looked weak in the later part of the week as market participants turned cautious in the run up to the outcome of the state elections," said SMC Investments and Advisors' Chairman and Managing Director D.K. Aggarwal.

"Also, the weak global cues dented the confidence of the market participants. Meanwhile, the RBI's Monetary Policy Review meeting was along expected lines."

Besides, crude oil prices remained volatile amid expectations of supply cuts by OPEC, the group of world's top 15 oil producers.

According to Mustafa Nadeem, CEO, Epic Research: "Amid a number of global events like the OPEC meeting, the arrest of Huawei's Global CFO has unnerved investors. Also, Assembly election outcomes due on Tuesday may fuel short-term volatility."

However, in the past week, the local currency gained Rs 1.21 from its previous week's close of Rs 69.59. The rupee closed at 70.80 a dollar on Friday.

"Markets corrected sharply this week from a high of 10,941 points. A bounce back towards the end of the week helped to curb the losses. Nifty ended with W-o-W losses of 1.68 per cent," said Deepak Jasani, Retail Research Head, HDFC Securities.

"Market breadth was negative in all the five trading sessions of the week. The top sectoral gainer for the week was the IT index. The top losers were pharma, auto and PSU bank indices."

In addition, Foreign Institutional Investors (FII) were net sellers during the review as it off-loaded a total of Rs 865.52 crore worth shares, while Domestic Institutional Investors (DII) sold scrip worth Rs 2,266.64 crore, provisional data from the BSE showed.

On stock specific basis, IT major Infosys gained 7.42 per cent, the most on Sensex during the week followed by IndusInd Bank with 6.70 per cent while Mahindra and Mahindra, Reliance Industries and HDFC advanced in the range of 5 to 6 per cent.

Lending major Kotak Mahindra Bank gained steeply on Friday amid reports of Berkshire Hathaway Inc buying stakes in the bank.

Stocks fallen out of favour with investors were Yes Bank, shedding over 13 per cent during the week, followed by ONGC, Sun Pharma, Tata Motors and Tata Motors(DVR) whose share prices declined 5-7 per cent.

Pharmaceutical major Sun Pharma suffered heavy losses as investors distanced themselves, owing to the probe by SEBI on several charges of corporate disclosure and insider trading levied on pharma major. Tata Motors, too bore the brunt of downgrades by major rating agencies.

(Ravi Dutta Mishra can be reached at ravidutta.m@ians.in and Rohit Vaid at rohit.v@ians.in)