Indices post biggest weekly decline since June; Sensex falls 2.5%

Indian equity benchmarks posted the biggest weekly decline since June 2022 as investors navigated concerns about hawkish central banks, resurgent geopolitical tensions, and volatility on account of the continuing decline in Adani Group stocks.

The Sensex ended the week with a decline of 2.5 per cent and the Nifty50 with a decline of 2.7 per cent. On Friday the 30-shre index ended the session at 59,464 a loss of 142 points or 0.2 per cent. The 50-share Nifty, on the other hand, ended the session at 17,466, a loss of 45 points or 0.3 per cent. The decline in HDFC and HDFC Bank shares also weighed on the Sensex gains.

A sell-off in Chinese technology stocks amid profit hits and price wars took its toll on Asian equities.

The recently released US macroeconomic data ignited fears that rate hikes will have to remain elevated to bring inflation under control in the US.

Moreover, Russian President Vladimir Putin’s statement on Tuesday that Russia was suspending its participation in the New Start nuclear arms treaty compounded investor fears. Putin's statement came a day after US President Joseph Biden made a surprise visit to Kyiv and promised to defend Ukraine's territorial integrity and increased arms deliveries.

Meanwhile, Adani Group stocks continued their decline on Friday with seven out of the ten group stocks ending in the red. Adani Total Gas, Adani Transmission, Adani Green Energy, Adani Power and Adani Enterprises declined by 5 per cent each. New Delhi Television went down by 4.1 per cent and Adani Wilmar by 3.3 per cent.

“The domestic market is broadly demonstrating a lack of confidence, registering its sixth consecutive day of losses despite global markets turning green. Continued selling in the domestic market by FIIs is acting as an overhang in sustaining the early gains, " said Vinod Nair, head of research, at Geojit Financial Services.

On Friday foreign portfolio investors were net sellers to the tune of Rs 1,470 crore and domestic investors bought shares worth Rs 1,401 crore, according to provisional data from the exchanges.

“In the near term, we expect the market to consolidate in the absence of any fresh trigger. However, stock-specific action could be seen. Next week, investors will take cues from macro data, including GDP and PMI numbers, that would be released. Auto sector stocks would be in focus on the back of monthly sales data to be announced next week,’ said Siddhartha Khemka, head of research- retail, Motilal Oswal Financial Services.

Market breadth was weak with 2,035 stocks declining and 1,423 advancing on the BSE. Half of the Sensex constituents declined with HDFC twins contributing the most.