Weekly Wrap: Investors Lose Rs 4.5 Lakh Crore As Sensex, Nifty Log Worst Week In Five Months
Indian equity benchmarks logged the worst week in nearly five months, wiping off around Rs 4.5 lakh crore of investor wealth.
Indian equity benchmarks logged the worst week in nearly five months, wiping off around Rs 4.5 lakh crore of investor wealth.
Halting three-week gaining streak, the S&P BSE Sensex index fell 2.96 percent to end at 37,673.31 and the NSE Nifty 50 index declined 2.93 percent to 11,174.75. The biggest losses for the week came on Friday despite the Monetary Policy Committee’s 25-basis-point cut in the repo rate as weakening global sentiment aggravated concerns around a slowing domestic economy.
The markets on Friday plunged sharply because of weak domestic cues, according to Ajit Mishra, vice president-research at Religare Broking. “The beginning was upbeat, thanks to firm global markets but anxiety ahead of the RBI policy outcome capped movement. The sentiment dented as the RBI lowered its growth forecast which triggered a sharp decline across the board.”
Epic Research’s Chief Executive Officer Mustafa Nadeem attributed the recent declines to the global slowdown. The selloff in the U.K. and U.S. markets because of weakening indicators spread to other Asian indices, he said. “A lot of cues will now be taken from important results of TCS, Wipro, and Infosys. That volatility may be inching up in specific sectors and some rotation may be seen. We will also see global developments taking the lead since everyone has their eyes on the U.S.-China trade war,”
RBI Decision Day: Key Highlights
India’s monetary policy committee on Friday cut interest rates for the fifth time this year to support growth in the economy. The benchmark repo rate has now come down 135 basis points since the start of the year. The MPC decided to maintain its stance at ‘accommodative’ “as long as it is necessary to revive growth, while ensuring inflation remains within the target”.
Read to get up to speed:
- ‘RBI would not allow a cooperative bank to collapse’ – Governor Shaktikanta Das on PMC Bank crisis.
- RBI eases norms for microfinance lenders, hikes loan limit to Rs 1.25 lakh.
- Not aware of government demand for interim dividend, Shaktikanta Das says.
- RBI top team faces fire on financial stability risks.
- Here’s what brokerages made of RBI’s repo rate cut
How Sectors Performed
Ten out of 11 sectoral gauges compiled by the National Stock Exchange ended lower this week, led by the NSE Nifty PSU Bank Index’s 8.5 percent fall. The NSE Nifty IT Index was the only gainer, up 0.68 percent.
How Broader Markets Performed
The broader markets represented by the NSE Nifty 500 Index fell 3.24 percent, led by the declines in Indiabulls Housing Finance Ltd., Indiabulls Ventures Ltd. and Dewan Housing Finance Ltd.
How Currencies Performed
The rupee was the worst performing Asian currency this week. The Indian currency depreciated 0.45 percent this week to close at 70.89 against the U.S. dollar.
Big Talking Points This Week
- India sticks to borrowing plan For 2019-20 despite corporate tax cuts.
- No festive revival yet for automakers.
- The end of the Rana Kapoor era at Yes Bank.
- Boris Johnson gets one week to improve his Brexit offer or face delay.
- Oil set for biggest weekly drop since July on demand pessimism.
- World economy sends up flares as manufacturing slump hits U.S.
- PMC Bank Case: HDIL’s Rakesh and Sarang Wadhawan arrested, shares fall.
- U.S. to put tariffs on European planes, whiskey, cheese after WTO ruling.
- Hong Kong invokes rare emergency powers, sparking fresh protests
Earnings To Watch Next Week
- IndusInd Bank Ltd.
- Infosys Ltd.
- Tata Consultancy Services Ltd.
Data To Watch Next Week
- Oct 11: India Industrial production data for August.