Weekly Wrap: Budget Blues Continue To Haunt Investors For Second Straight Week
Indian equity benchmarks registered their worst week in two months amid investor disappointment over the budget
Indian equity benchmarks registered their worst week in two months amid investor disappointment over the budget and concern about the outlook for corporate earnings.
The S&P BSE Sensex closed 1.9 percent lower this week at 38,736.23 and the NSE Nifty 50 dropped 2.2 percent to close at 11,552.50.
Investors were disappointed with the union budget as it did not favour markets, according to Hemen Kapadia, research head at KRChoksey.
“The street was not expecting much from the union budget regarding the capital markets,” Kapadia told BloombergQuint over the phone. “Despite this, the budget turned out to be negative.”
Commenting on valuations, Kapadia said that the markets were technically overbought. “The Nifty wasn’t able to sustain 12,000 as the valuations were not comfortable.”
Kapadia expects the markets to be in the downward trajectory in the near future. “It won’t be surprising if the Nifty gives up 11,400.”
Nine out of 11 sectoral gauges compiled by the National Stock Exchange ended lower this week, led by the fall in NSE Nifty PSU Bank Index. On the flipside, the NSE Nifty Pharma Index was the top sectoral gainer, up 2.75 percent.
How Broader Markets Performed
The broader market index represented by the NSE Nifty 500 Index closed 2.1 percent lower during the period, led by the declines in Jet Airways (India) Ltd., Cox & Kings Ltd. and Sadbhav Engineering Ltd.
How Money Markets Performed
The Indian rupee halted a three-week gaining streak. The home currency depreciated 0.39 percent to close the week at 68.68 against the greenback.
Big Talking Points This Week
- CPI Inflation rises to an eight-month high in June.
- India’s industrial output growth at 3.1 percent in May.
- Inflows into equity mutual funds jump the most in three months.
- IndiGo Promoter Gangwal’ writes to SEBI to intervene and resolve grievances. (Here’s all you need to know about the spat)
- Walmart got a $10 billion surprise after buying Flipkart.
- Reliance Infrastructure finally enters formal debt restructuring.
- Banks may seek changes in insolvency law after NCLAT’s Essar Steel verdict, says SBI.
- India’s World Cup run ends after top order collapse, Jadeja heroics.
Key Earnings Announced This Week
Earnings To Watch Next Week
Data To Watch Next Week
- July 15: India Wholesale inflation data for June
- July 15: India trade data for June.