Traders monitor financial data on computer screens on the trading floor. (Photographer: Luke MacGregor/Bloomberg)

Weekly Wrap: Trade War Concerns Drag Sensex, Nifty To Worst Week Since October

Indian equity benchmarks ended lower for the third consecutive week, clocking their worst week in over seven months after escalating trade tensions and crucial macroeconomic data added to the uncertainty caused by the general election.

The S&P BSE Sensex closed 3.9 percent lower this week to end at 37,462.99 and the NSE Nifty 50 ended at 11,278.90, down 3.7 percent.

“The lingering trade tension between the U.S. and China combined with anxiety ahead of the crucial macroeconomic data viz. IIP and CPI inflation was weighing on the sentiment,” Sanjeev Zarbade, vice president of PCG Research at Kotak Securities, said in a statement.

We expect volatility to remain high next week too thus suggest focusing on risk management aspects and preferring hedged trades, Zarbade said.

“The Nifty as per weekly timeframe formed a long bear candle and closed near lows. This weekly candle pattern signals a formation of top reversal and this pattern indicates a reversal of prior uptrend,” Religare Broking’s Jayant Manglik said in a separate statement.

The short-term trend of the Nifty is weak. Any intra-week upside bounce from near the support of 11,250 is unlikely to hold for long. Next downside levels to be watched at 11,000.
Jayant Manglik, President - Retail Distribution, Religare Broking Ltd.

How Broader Market Performed

The broader market represented by the NSE Nifty 500 Index closed 3.5 percent lower during the week.

All the 11 sectoral gauges compiled by National Stock Exchange ended lower, led by the NSE Nifty Metal Index’s 6.8 percent fall.

How The Rupee Performed

The Indian rupee fell 1 percent this week to end at 69.91 against the U.S. dollar after U.S.-China trade tensions spooked Asian currencies.

Big Talking Points This Week

  • Industrial output contracts for the first time in almost two years.
  • Election Phase 5 Live: Total voter turnout at 62.56 percent.
  • India’s services sector output growth at seven-month low in April.
  • BJP to get majority with allies, Ram Madhav says.
  • Cyclone-ravaged Odisha seeks $14 billion for reconstruction.
  • Deposits in Jan Dhan accounts inch close to Rs 1 lakh crore.
  • GST anti-evasion unit goes after car dealers for retrospective tax.
  • Gold imports by India are said to have jumped ahead of festival.
  • Vodafone Group pledges Vodafone Idea shares.
  • Home loan firms seek guarantee cover as they tread into riskier segments.
  • Apple is said to be close to opening first retail store in India.
  • Government may have curbed spending by over Rs 1 lakh crore to meet fiscal deficit target.
  • The days of free UPI money transfers may be ending.

Key Events To Watch Next Week

  • May 13: April CPI data.
  • May 14: April WPI data.
  • May 15: India trade data.