Moneycontrol Bureau
Benchmark indices as well as broader markets lost more than 1 percent Friday on global weakness. Investors maintained cautious stance ahead of Sunday's referendum in Italy & US non-farm payrolls data due later today. Fears of likely delay in GST implementation also caused selling pressure while the RBI announcement on market stabilisation scheme (MSS) failed to cap the downside.
The 30-share BSE Sensex plunged 329.26 points or 1.24 percent to 26230.66 and the 50-share NSE Nifty was down 106.10 points or 1.30 percent at 8086.80, continuing downtrend for the second consecutive session. About two shares declined for every share on the BSE.
Going ahead, apart from the Italian referendum and US non-farm payrolls data, markets will be influenced by the RBI action on MSS as well as the rate decision in the ensuing policy meeting next week, Dipen Shah of Kotak Securities said.
The US Fed meet mid-month will also be keenly watched. While a rate hike is widely expected, markets will watch out for the comments accompanying the decision, Shah feels.
According to Vibhav Kapoor of IL&FS, the emerging markets are unlikely to do well in the near-term owing to a stronger dollar and rise in US bond yields. He sees huge amounts of money flowing back from the EMs to the US.
He says demonetisation or not, the Indian market is bound to suffer due to this in the near-term. Nifty, he says, is sure to break the Brexit day low point of 7,927 points.
For the week, the Sensex and Nifty shed 0.3 percent each while the broader markets outperformed.
European bourses were lower as political uncertainty in Italy and France intensified. Investors are worried because referendum could spark fresh elections and complicate the recapitalisation process of Italian banks. France's CAC, Germany's DAX and Britain's FTSE were down around a percent each at the time of writing this article. Asia also ended lower.
Meanwhile, the Reserve Bank of India has decided to revise ceiling for issue of securities under market stabilisation scheme (MSS) to Rs 6 lakh crore from earlier limit of Rs 30,000 crore. After the withdrawal of the legal tender of the Rs 500 and Rs 1000 denomination notes with effect from November 9, 2016, there has been a big surge in bank deposits.The rupee appreciated further for the fourth consecutive session today. It closed at 68.19 against the US dollar, up 15 paise compared with previous session.
All sectoral indices ended in red. Nifty Bank, Auto, IT, FMCG, Metal and Realty indices were down 1-2 percent. Only four out of Sensex 30 stocks ended in green.
HDFC and ITC were the leading contributors to Sensex's fall, down 2 percent each. Tata Motors, Asian Paints, Maruti Suzuki and Adani Ports were the biggest losers, shedding more than 3 percent.
Bajaj Auto gained 0.64 percent and Hero Motocorp rose 0.2 percent despite 13 percent decline in November sales YoY. Cipla and ICICI Bank were other gainers.
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