Weekly roundup: Bears take charge as Sensex down for 1st time in 4 weeks

The market settled lower for the first time in four weeks with the tax relief for foreign portfolio investors (FPIs) and the resolution of dual control issue on Goods and Services Tax (GST) failing to outweigh the negative earnings from financials, International Monetary Fund (IMF)’s 100 basis points cut in growth forecast and global concerns ahead of US president-elect Donald Trump’s swearing-in ceremony. Trump took presidency oath post market hours on Friday. 

During the week ended January 20, the S&P BSE Sensex fell 0.7% or 203 points to settle at 27034, while Nifty50 lost 0.6% or 51 points to close the week at 8349.

Midcap and Smallcap stocks outperformed. The BSE Midcap index slipped just 0.4%, while the BSE Smallcap index bucked the trend to surge 0.6% for the week. 

Among Sensex stocks, Reliance Industries, Axis Bank and Coal India plunged 6%, 4.8% and 3.5%, respectively, while Adani Ports lost 3.1%, Infosys dipped 2.7%, while ONGC slumped 2.2%.

Gainers included Hindustan Unilever, Asian Paints and ITC, which rallied 4%, 3.5% and 2.4%, respectively. Tata Steel gained 1.8%, Gail (India) 1.7%, and Tata Motors added 1.6%. 

"Till Thursday, Q3 results were coming marginally above expectations and the market was holding a positive view. However, a poor set of numbers led by financials has annoyed the investors turning them cautious. Additionally, commodity stocks are losing their attractiveness due to consolidation ahead the Trump swearing-in ceremony today. IT and Pharma stocks will be keenly watched as the segment may be effected from the upcoming US policies."

The week saw foreign outflows abating after the Central Board of Direct Taxes put in abeyance its earlier circular that had raised foreign investors' concerns over a potential rise in tax liability under indirect transfer provisions. Street also welcomed the GST Council breaking deadlock over issues of administrative control over assesses, which broadly agreed to roll out the GST from July 1, instead of the earlier deadline of April 1.

However, IMF’s disappointing growth forecast dampened bullish spirit right before global sentiment turned cautious after US Fed chair Janet Yellen’s slightly hawkish comments over future rate hikes, European Central Bank’s policy meeting and Trump’s inauguration. 

MARKET NEXT WEEK
 

Amid ongoing earnings season with Budget 2017 approaching, the market is expected to witness heightened volatility in a holiday-truncated expiry week. Investors will react to Trump’s inauguration speech on Monday, wherein he hinted again at his protectionist stance by reiterating US policy will be to buy American and hire American, while earnings results of heavyweights like, HUL, HDFC, Bharti airtel  and Ultratech will also be in focus.