The benchmark Sensex on Friday ended 128 points lower and the Nifty below the 8,200-mark ahead of key global events, including the US Federal Reserve meet and the Brexit outcome, and release of the Index of Industrial Production (IIP) data back home.
Caution prevailed in a choppy trade ahead of the US Federal Reserve meeting next week and worries over Britain’s referendum on its European Union membership on June 23, which hit the sentiment. Both the indices have recorded their first fall in three weeks as the spillover from a weak global market cast its shadow.
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- Sensex crashes 444 pts on US Fed rate hike jitters
- Sensex logs first fall in three weeks on global cues
After opening lower, the 30-share Sensex staged a strong comeback on value-buying coupled with short-covering but closed the day lower by 127.71 points, or 0.48 per cent, at 26,635.75. The index had lost 257.20 points in the previous session as investors booked profit after the recent run-up. The NSE Nifty closed a shade lower than the 8,200-mark at 8,170.05, down 33.55 points, or 0.41 per cent, after hovering between 8,162.85 and 8,265.60.
The PSU banking index on the NSE lost more than 1.5 per cent after Moody’s Investors Service said weak earnings outlook for PSU banks raises concern over high
level of external capital need and their capitalisation profile is expected to deteriorate unless the government offers additional support. The BSE Sensex fell 207.28 points during the week.
Vinod Nair, head of Research, Geojit BNP Paribas Financial Services, said, “continued weakness in the European
market and a positive expectation over India’s IIP data oscillated the market which closed with a loss of 0.41 per cent. A curb in global growth outlook by the World Bank and consensus that CPI inflation in May can increase to 5.6 per cent (5.39 per cent in April) compelled investors to stay cautious on the Dalal Street.”
Atul Kumar, head Equity Funds, Quantum MF, “on the domestic side, the big positive remains forecast for above normal monsoons by the Indian meteorological department, which has been one of the key driver of market rally in the month of May 2016. Macroeconomic indicators including a surplus current account and benign inflation continue to indicate India is in a sweet spot. Overall the macro indicators suggest foundations are being laid for a potentially strong and sustainable growth for the Indian economy over the next few years barring any major international shock.” Among Sensex stocks, GAIL tanked most by falling 2.09 per cent on profit-booking followed by Tata Steel 2.08 per cent. As many as 21 stocks lost. Others major ones that faltered included Tata Motors, Coal India and SBI.