Hawkish RBI tone in its latest minutes and consistent selling by FIIs in April (after highest ever buying in March) also dampened sentiment.
The market reversed its morning gains to close moderately lower on Friday as investors remained cautious due to mixed earnings (so far) and ahead of French election on Sunday. Hawkish RBI tone in its latest minutes and consistent selling by FIIs in April (after highest ever buying in March) also dampened sentiment.
The 30-share BSE Sensex was down 57.09 points at 29,365.30, and the 50-share NSE Nifty slipped 17 points to 9,119.40 after hitting an intraday high of 9,183.65, dragged by FMCG, healthcare, select auto and banking & financials stocks.
Markets can see an increase in volatility on account of the expiry and declaration of results by a bunch of companies like Indiabulls Housing Finance, Reliance, Ultratech Cement, Axis Bank, Wipro, Kotak Mahindra Bank & Maruti among others next week, said Jimeet Modi, CEO of SAMCO Securities.
From a medium to long term perspective, he feels the Nifty could fall to 8900 level. Traders should stay in the side lines and fresh longs should only be initiated only after a break out above 9250 levels, he advises.
Vinod Nair, head of research at Geojit Financial Services said the quarter results till date has painted a mixed picture while concern over upcoming French election is adding risk to the market. A hawkish tone of RBI in its latest minutes has also added pressure on the downside, he added.
Inflation developments have to be closely and continuously monitored, with food price pressures kept in check, said the RBI in its latest minutes released on Thursday, adding inflation path through 2017-18 appears uneven and challenged by upside risks and unfavourable base effects towards the second half of the year. The future course of monetary policy will largely depend on incoming data on how macroeconomic conditions are evolving.
"We concur with the majority of the Monetary Policy Committee members on upside risks to inflation and now expect a cumulative 50 bps repo rate hike in 2018," Nomura said in a research note.
The broader markets continued to outperform benchmarks with marginal gains on positive breadth. About 1455 shares advanced against 1417 declining shares on the BSE.
For the week, the Sensex and Nifty lost 0.3 percent each on top of more than half a percent loss in previous week.
Meanwhile, the International Monetary Fund in its latest Global Financial Stability Report said India's debt, one of the highest among emerging markets, could worsen further in this 'environment of growing protectionism and risk premiums'. The debt at risk could increase by as much 6.7 percentage point, it added.
HDFC Bank was the biggest gainer among Sensex stocks, up 2.38 percent after stable earnings and asset quality in Q4FY17. Profit increased 18 percent but higher provisions limited the growth while net interest income grew by 21.5 percent, aided by average assets growth of 19 percent and core net interest margin of 4.3 percent.
Reliance Industries gained 2.2 percent ahead of quarterly earnings on April 24 and after company became the second largest producer of para-xylene. Details on energy project execution and updates on Reliance Jio would be key factors to watch out for in earnings.
Disclosure: Reliance Industries, the parent company of Reliance Jio, owns Network 18 that publishes Moneycontrol.com.
Sun Pharma share price lost 2.4 percent after CNBC-TV18 reports quoting agencies that the company has received 11 observations from the US health regulator for its Dadra unit. The USFDA saw incomplete lab records at company's plant.
Wipro fell 1.4 percent as sources told CNBC-TV18 that the IT company trimmed its workforce by 350-400 employees after recent performance appraisal.
Among other Sensex stocks, ITC, ICICI Bank, HDFC, SBI, Adani Ports, TCS, HUL and Maruti Suzuki were down 0.7-2 percent while NTPC gained 1.8 percent.On the global front, European markets gained momentum despite a suspected terrorist attack in France two days before a key presidential vote. Asian stocks closed higher.