Mumbai: Subdued investor sentiments on the back of persistent depreciation in the Indian rupee along with high crude oil prices pulled the domestic equity market lower for the second consecutive week.
Investors feared that the current pace of rupee depreciation and the rise in crude oil prices could lead to a RBI rate hike.
However, the initial losses were pared after the key indices rose during the last two sessions of the September 10-14 period. Lower retail and wholesale macro-data for August and attractive valuations enhanced investors' risk-taking appetite.
Consequently, the barometer S&P BSE Sensex lost close to 1,000 points in the first two trading sessions, eventually leading to value buying during the later part of the week.
In addition, a high-level meeting held by Prime Minister Narendra Modi to take stock of the economy on Friday also boosted the sentiments and lifted the indices, thereby trimming the losses on a weekly basis.
Globally, investor sentiments received a boost on Thursday after reports emerged of possible US-China trade talks.
On a weekly basis, the S&P BSE Sensex closed at 38,090.64 points, lower 299.18 points or 0.77 per cent from its previous close.
Similarly, the wider Nifty50 on the National Stock Exchange on Friday ended at 11,515.20 points, down 73.9 points or 0.63 per cent from the previous week's close.
According to Prateek Jain, Director at Hem Securities, investors' sentiments were affected as the Indian rupee touched record low levels and a rise in crude oil prices.
"Indian bourses were inherently overbought and the correction was a natural step for the market to correct the situation," he said.
Equity99's Senior Analyst, Rahul Sharma said: "Though markets cheered fall in inflation but rupee depreciation along with higher oil prices have raised the possibility of rate hike by RBI in next monetary policy meeting."
Heavy selling pressure, which was witnessed by Foreign Institutional Investors in both the cash and futures segment in the week gone by, still remains a concern for the markets, he added.
In terms of investments, provisional figures from the stock exchanges showed that foreign institutional investors sold scrip worth Rs 2,291.87 crore, while the domestic institutional investors bought stocks worth Rs 1,116.54 crore in the past week.
Figures from the National Securities Depository (NSDL) suggested that foreign portfolio investors (FPIs) divested Rs 3,076.38 crore, or $424.03 million, in the equities segment during the week ended September 14.
On the currency front, the rupee touched a fresh low of 72.91 a US dollar during the week. However, towards the end of the week it recovered to close at 71.85 on Friday, weakening by 12 paise from its previous week's close of 71.73 per greenback.
The top sectoral gainers were metal and infrastructure indices, while the major sectoral losers were the auto, public sector banks and FMCG indices, said Deepak Jasani, Head of Retail Research at HDFC Securities.
The top weekly Sensex gainers were NTPC (up 3.80 per cent at Rs 175); Bajaj Auto (up 3.41 per cent at Rs 2,878.15); Bharti Airtel (up 3.06 per cent at Rs 383.65); Wipro (up 3.03 per cent at Rs 330.15); and Vedanta (up 2.70 per cent at Rs 235.50 per share).
The major losers were Yes Bank (down 4.69 per cent at Rs 323.10); State Bank of India (down 2.11 per cent at Rs 290.40); Coal India (down 2.08 per cent at Rs 277.30); Kotak Mahindra Bank (down 1.81 per cent at Rs 1,237.50); and Sun Pharma (down 1.71 per cent at Rs 665.10 per share).
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