Markets wipe weakly gains post GDP numbers

Sensex ended 284 points lower and Nifty ended 82.40 points lower, IT stocks biggest losers

On Friday the markets were unable to hold the Fed cheer and both Nifty and Sensex ended over a percentage point lower.

Nifty closed at 7761 down around 82 points and Sensex ended 284 points lower at 25,519.22 in day's trade. Markets were trading lower post the Government's mid -year economic review, which revised the GDP estimates from earlier 8-8.1% to 7-7.5%.

"Markets ended a volatile week with losses on Friday. The weak US markets likely impacted sentiments and the markets failed to hold on to Thursday's gains. The US Fed hike has had little impact on the markets globally, with the event largely discounted early on. The cautious outlook for FY17 by the Chief Economic Advisor (CEA) on Friday likely impacted sentiments," said Dipen Shah, Senior Vice-President & Head of Private Client Group Research, Kotak Securities.

The markets were trading higher almost all of the week gone by due to market factoring in the Fed decision to raise rates by 25 basis points. The market optimism was due to possibility of certainty in cash flow post Fed action.

"Investors seem to be worried as the government lowered its GDP growth forecasts for FY16 to 7-7.5% from earlier estimates of 8.1-8.5%. Further, continued weakness in commodity prices globally has raised concerns of global economic growth," said Gaurav Jain, Director, Hem Securities.

However, some in the market are maintaining that GDP revision was nothing new and the market was expecting it.

"The change in GDP growth forecast by the Government to 7 to 7.5% on the back of the impact of agriculture output slowing down due to a poor monsoon is not a surprise. The forecast by Moody's was at 7.4%. Likewise, the consensus estimates for GDP growth as per Bloomberg was at 7.4%. Acceptance of the reality by Government has just come about. It is nothing new and this reduction was already anticipated by most market analysts in their assumptions. At the margin, things are getting slightly better as evidenced by the 9.8% IIP growth in October," Sandeep Nayak, ED & CEO, Centrum Broking.

Amongst the key indices the market was dragged down due to information technology stocks. S&P BSE information technology index was trading lower by 1.31% and S&P BSE Teck was lower by 1.07% at the end of trade on Friday.

Infosys was trading lower by 21 points or 1.9%, TCS lost close to 24 points or 0.98% in the day's trade. These stocks faced pressure after the U.S. Congress decided to impose a special fee of $4,000 on certain categories of H-1B visas and $4,500 on L-1 visas. The fee would apply to companies having at least 50 employees with 50% of their employees on H-1B or L-1 visa.

Consumer Durables and Utilities were the gainers in the sectors' front, closed up around 1.01% and 0.31% respectively. The gainers in the stocks' front were Adani Ports and Idea, closed up around 1.83% and 0.93 cent respectively. The losers on the other end are Vedanta and Ultra Tech cement down around 3.16% and 2.89% respectively.

Both the domestic as well as foreign investors were net sellers. Foreign portfolio investors sold Rs 5,649.43 crore worth of shares on Friday and domestic investors sold Rs 1,853.02.