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Weekly Wrap: Earnings Anxiety Wipes Out Gains With Friday Selloff

The S&P BSE Sensex closed 1.03 percent lower this week at 38,337.01 and NSE Nifty 50 dropped 1.15 percent to close at 11,419.25.



A security guard stands outside the Bombay Stock Exchange building (Photographer: Adeel Halim/Bloomberg News)
A security guard stands outside the Bombay Stock Exchange building (Photographer: Adeel Halim/Bloomberg News)

Indian equity benchmarks extended losses for the second week in a row after a selloff during Friday’s session.

The S&P BSE Sensex closed 1.03 percent lower this week at 38,337.01 and the NSE Nifty 50 dropped 1.15 percent to close at 11,419.25. Only one stock in the Nifty 500 Index—HDFC Asset Management Company Ltd.—closed at a 52-week high.

“Though it (benchmarks) opened with an uptick but fizzled out in no time, citing continuous foreign outflows, U.S.-Iran geopolitical tensions and anxiety around the earnings,” Ajit Mishra, vice president (Research) at Religare Broking Ltd., said.

Indices are facing headwinds on both the domestic and global front and might take further beating in following sessions, Mishra said, adding that investors should “cautiously take hedged positions instead of naked trades”.

On the technical front, there is possibility of a minor upside bounce in the Nifty from 11,350-300 levels by next week, Nagaraj Shetti, senior technical & derivative analyst at HDFC Securities, said.

10 of the 11 sectoral gauges compiled by the National Stock Exchange ended lower this week, led by the fall in the NSE Nifty Auto Index. On the flip side, the NSE Nifty IT Index was the top sectoral gainer, up 1.03 percent.

How Broader Markets Performed

The broader market index, represented by the NSE Nifty 500 Index, closed 1.62 percent lower during the period, dragged down by declines in Cox & Kings (India) Ltd., RBL Bank Ltd. and Dewan Housing Finance Corporation Ltd.

Key Earnings Announced This Week

Big Talking Points This Week

  • RBI panel on economic capital framework suggests staggered transfer of some reserves.
  • Three proposals that Morgan Stanley says could fetch India $25 billion in foreign investments.
  • Fed says U.S. economy trundles steadily along, outlook positive.
  • UN Court directs Pakistan to review case of Kulbhushan Jadhav.
  • India’s pharma market grows at slowest pace in five years.
  • World’s hungry continue rising amid war, climate change.
  • India’s trade gap narrows as import demand wanes.
  • Super-rich tax surcharge has already started impacting foreign investments in India.
  • IMF warns rising trade-war risk is weighing on global economy.
  • Yes Bank CEO Ravneet Gill says asset quality troubles have peaked.
  • What Karnataka politics tells us about Indian democracy.

Events To Watch Next Week

  • July 22: Chandrayaan 2 to be launched.
  • July 23: New U.K. Prime Minister to be named.
  • July 25: Rate decision of European Central Bank.