Markets see worst weekly setback since August

The benchmark indices fell for a fourth straight session on Friday, extending their weekly losses to over 2.5 per cent. This was the worst weekly performance for the Indian markets since August 2013. The second-quarter gross domestic product (GDP) numbers showing a revival in the economy did little to dispel concerns over a widening fiscal deficit.

The BSE benchmark Sensex dived 316 points, or 0.95 per cent, to close below the 33,000-mark, while the broader NSE Nifty declined 104.75 points to 10,121.80. The India VIX index shot up 10 per cent to 14.8 from the previous week’s close of 13, indicating more turbulence in the week ahead.

“Despite data pointing to an improvement in the macroeconomic environment, participants remained cautious and chose to sell stocks in the latter half of the trading day,” said Karthikraj Lakshmanan, senior fund manager (equities), BNP Paribas Mutual Fund.

The 30-share benchmark, after scaling a high of 33,300.81 in early deals, slipped into the negative zone to touch 32,797.78, before settling at 32,832.94, down 316.41 points. The 50-issue Nifty, too, cracked the 10,200-mark and hit a low of 10,108.55 before finishing 104.75 points, or 1.02 per cent, down at 10,121.80.

Reversing a five-quarter slide in GDP growth, the economy bounced back from a three-year low to expand 6.3 per cent in July-September as manufacturing revved up and businesses adjusted to the new goods and services tax regime, data released after market hours on Thursday showed. However, participants remained risk-averse as India’s fiscal deficit at the end of October hit 96.1 per cent of the Budget estimate for 2017-18, mainly due to lower revenue realisation and rise in expenditure.

Foreign portfolio investors (FPIs) sold shares worth net Rs 306 crore, while domestic institutional investors (DIIs) bought shares worth Rs 176 crore on Friday, according to provisional data. In the previous two sessions, FPIs had pulled out Rs 2,100 crore from domestic stocks.

The Sensex ended November little changed after gaining six per cent in the preceding month. Market players say the market will now take cues from the Reserve Bank of India’s policy announcement on Wednesday.

Small- and mid-cap indices fell 1.16 per cent and 0.95 per cent, respectively, in Friday’s session. The session saw buying in select auto stocks such as Maruti Suzuki, TVS Motor and Ashok Leyland, buoyed by encouraging sales data for November. 

Among the Sensex constituents, Adani Ports suffered the most by diving three per cent, followed by Bajaj Auto at 2.99 per cent, despite reporting a 21 per cent rise in total sales in November. Kotak bank rose 0.23 per cent, followed by NTPC at 0.14 per cent.

Globally, other Asian markets traded mixed after investors shifted nervously as US President Donald Trump’s much-hyped tax cut plans hung in the balance after a plan to push them through hit unexpected hurdles.

Hong Kong’s Hang Seng finished 0.35 per cent lower, while Korea fell 0.04 per cent. Japan’s Nikkei, however, rose 0.41 per cent and the Shanghai Composite Index edged up 0.01 per cent.

European shares were down in their early deals.

Frankfurt’s DAX was down 0.77 per cent and Paris CAC 40 lost 0.76 per cent. London’s FTSE, too, fell 0.18 per cent.