Weekly Wrap: Sensex, Nifty Log Worst Week In A Month As NBFC Stocks Drag
Sensex ended 0.41 percent lower this week at 39,452 and the Nifty 50 closed at 11,823.30, down 0.4 percent.
Indian equity benchmarks ended lower for the second straight week as renewed fears tied to non-bank lenders triggered a sell-off in banking stocks.
The S&P BSE Sensex ended 0.41 percent lower this week at 39,452 and the NSE Nifty 50 closed at 11,823.30, down 0.4 percent. Also, Brent crude prices touched below the $60-per-barrel mark for the first time since January this year.
“Markets were in a narrow range as fresh concerns related to the Reliance Group and Dewan Housing Finance Corporation Ltd. led to selling pressure in banks,” Sanjeev Zarbade, vice president of PCG Research at Kotak Securities Ltd., said. “Also, the non-banking financial companies’ stocks were under pressure on fears of default and more regulatory measures from the Reserve Bank of India.”
During the week, Price Waterhouse & Co resigned as one of the statutory auditors of Reliance Capital Ltd. and Reliance Home Finance Ltd. citing certain transactions in its assessment. DHFL missed Rs 962 crore in interest payments on non-convertible debentures, prompting rating agencies to downgrade its rating to ‘default’ grade. The dues, however, were repaid within a seven-day ‘cure period’.
Upside movement in Nifty is difficult, according to Romesh Tiwari, head of research at CapitalAim. “Nifty may find it difficult to close over 12,000, where the supply is expected,” he said, adding that there will be a swift downside movement in the indices. “Nifty could soon touch 11,720 levels.”
Negative news flow from the finance sector on loan repayment is dampening the investor’s sentiments which can be a trigger for a bigger correction before the budget session.Romesh Tiwari, Head of Research, CapitalAim
Big Talking Points This Week
- Adani gets green light for controversial coal mine in Australia.
- SEBI’s new norms require more disclosures from rating agencies.
- Alibaba files for a Hong Kong mega-listing.
- Consumer inflation, industrial production growth at highest level since October 2018.
- Netflix takes step toward multimedia empire with new video games.
- Deferred tax assets mask PSU banks actual performance in 2018-19.
- Morgan Stanley bats For banking reforms to spur earnings-led growth in India.
- India plans to launch moon mission in July.
- Hong Kong’s extradition law: From a grisly murder to mass protests.
- Raghuram Rajan in the frame as Britain contemplates another foreign BOE boss.
- Passenger vehicle sales slump the most in 18 years.
- India’s GDP likely 3.5-5.5% during 2011-16, says former CEA Subramanian.
- Gulf tanker attacks: Who’s behind them and could war be near?
- Deloitte, BSR Associates: Government seeks five-year ban.
How Broader Markets Performed
The broader market represented by the NSE Nifty 500 Index declined 0.68 percent this week, dragged down by Jet Airways Ltd. and Jammu & Kashmir Bank.
The Best And The Worst Sectoral Performers
Nine out of 11 sectoral gauges compiled by NSE ended lower this week, led by the NSE Nifty Realty Index’s 3.1 percent fall. The NSE Nifty IT Index was the top sectoral gainer, up 1 percent.
How Rupee Fared This Week
The Indian rupee ended lower this week after it depreciated 0.21 percent to close at 69.80 against the greenback. The local currency was the third-worst Asian performer this week.