Sensex, Nifty log fourth straight weekly gain; technology shares jump

The benchmark indices logged their fourth straight weekly gain but ended weak on Friday amid weakening of the rupee and a surge in government bond yields. 

Release of the minutes of the Monetary Policy Committee meeting after market hours on Thursday indicated that the Reserve Bank of India (RBI) might shift to a hawkish monetary stance in June, which dented investors’ sentiment.

The Sensex fell 11.71 per cent to close at 34,415.6, while the Nifty50 index declined 1.25 points to finish the day at 10,564. Both indices, however, have gained nearly 6 per cent in the past four weeks. 

“Release of the minutes revive the risk of an earlier-than-expected rate hike,” Morgan Stanley said in a note.

Tech shares zoomed after IT major TCS on Thursday reported a 4.4 per cent growth in its consolidated net profit at Rs 69.04 billion for the March quarter and guided towards a better show in FY19.

Banking shares fell sharply after the RBI policy panel minutes suggested a hawkish tone. Shares of Yes Bank fell 3 per cent, ICICI Bank declined 2.5 per cent and State Bank of India declined 2 per cent.

“It seems the RBI is preparing investors for a rate increase, though it is too early to panic,” said G Chokkalingam, managing director, Equinomics Research & Advisory. “Though oil prices have surged, a good monsoon and slower private investment may lead the central bank to keep rates unchanged for a couple of quarters.”