Mumbai, March 14
Negative global cues and
disappointing retail inflation data led a benchmark index of Indian
equities markets to its worst weekly fall in 2015.
The benchmark
30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange
(BSE) plunged 945.65 points or 3.21 percent during the weekly trade
session ended March 13.
The Sensex ended March 13 trade at
28,503.30 points. For the weekly trade ended March 5, the BSE Sensex had
closed at 29,448.95 points.
For the previous weekly trade ended
March 5, the benchmark Sensex had gained 87.45 points or 0.29 percent at
29,448.95 points. The markets had closed the week ended Feb 28 at
29,361.50 points.
According to analysts the market sentiment
turned sour due to last weeks data which showed a sharp increase in the
US non-farm payroll data for January. This data can make the US Federal
Reserve to raise interest rates sooner than previously expected.
With higher interest rates, foreign portfolio investors (FPIs) are expected to be led away from emerging markets such as India.
"The
markets mostly witnessed downtrend in the week as of weak global cues.
In US, the markets were down due to strong jobs data. All other markets
around the globe were also trading lower," said Alex Mathews, head,
research, Geojit BNP Paribas Financial Services.
"In the
domestic front, the sell off was partly due to the fall in the rupee
against the US Dollar. The rise in the Dollar was due the investors
shifted to safe haven investment."
Reacting negatively to the
likely US rate hike the barometer index plunged 604 points or 2.05
percent on Monday. It closed Tuesday's trade lower by 135 points or 0.47
percent. On Wednesday, the Sensex closed 51 points or 0.18 percent
down.
However, despite the negative global cue the FPIs stayed
invested in the Indian markets. For the week ended March 13, the FPIs
bought stocks worth Rs.3,234.7 crore or $518.24 million, according to
data with the National Securities Depository Limited (NSDL).
On
Thursday the markets made some recovery after the Asian markets made
gains on the back of easing of monetary policy in South Korea and
Thailand.
On Thursday, the barometer index broke a consecutive
three-day losing streak by gaining 271.24 points or 0.95 percent as
automobile, capital goods and consumer durables stocks made healthy
gains.
Then again on March 13 the market sentiments turned
bearish as the data on retail inflation for February showed a marginal
increase from the previous month. This belied expectations of a rate cut
next month, pulling down interest-sensitive sectors like banking,
capital goods and automobile in particular.
The Reserve Bank of India is scheduled to announce its first bi-monthly policy review for 2015 on April 7.
The
markets discounted India's factory output in January which gained
momentum. It also overlooked the parliament's approval to the insurance
law amendment bill in the Rajya Sabha, despite opposition protests.
On
Friday, the Sensex closed the day's trade at 28,503.302 points, down
427.11 points or 1.48 percent from the previous day's close at 28,930.41
points.
"Domestic equities further weakened on concerns
regarding passage of pending bills in the parliamen’'s upper house,"
said Rajesh Iyer, head, investment advisory services and family office,
Kotak Wealth Management.
Analysts pointed-out that the markets
will will keenly focus on the government's ability to pass the crucial
land and coal bills in Rajya Sabha in the coming days.
"The FPIs
in the coming week will keenly follow parliament's proceedings
especially the government's ability to pass more bills," ZyFin Advisors
chief executive Devendra Nevgi told IANS.
The first session of the parliament in 2015 will end on March 20 and will reconvene after a break of one month.
On
the international front the US Fed meet on March 17 and 18 will be a
major trigger for the Indian market. This meeting will provide the
trajectory of the US economy, which will also reveal as to when the rate
hike might take place.
The data on the wholesale price index
(WPI) and the fourth-nightly fuel price review by the three state-run
oil marketing companies (OMCs) will be the major domestic triggers for
the Indian markets in the coming week.
