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Sensex, Nifty fall amid hike in crude oil price, deficient monsoons

Both indices logged their third straight weekly fall. The rupee ended at 69.57, compared to the previous day's close of 69.44

Sundar Sethuraman  |  Mumbai 

Sensex, Nifty fall amid hike in crude oil price, deficient monsoons

The benchmark reversed most of the gains posted on Thursday, following dovish statement by the US Federal Reserve, as the deficiency in rainfall and rising dampened sentiment.

The closed at 39,194, down 407 points or 1.03 per cent, while the ended at 11,724, down 108 points or 0.91 per cent.

Both logged their third straight weekly fall. The ended at 69.57, compared to the previous day’s close of 69.44.

On Friday, the India Meteorological Department said the cumulative rainfall during this year’s southwest season was below the long period average (LPA) by 43 per cent.

LPA is the average rainfall received across the country as a whole during the southwest monsoon, for a 50-year period. A deficient delays sowing and affects crop output. Further, the season accounts for a huge chunk of India’s annual rainfall.

Meanwhile, a spurt in tensions between the US and Iran led to a surge in Brent crude rose 4.3 per cent overnight.

Yield on the 10-year government security rose 6 basis points (bps), as higher oil prices spared concerns of high inflation and trade deficit. In the earlier session, the 10-year G-sec had ended at a 20- month low after dropping over 50 bps in the past six weeks.

Sensex, Nifty fall amid hike in crude oil price, deficient monsoons

“We are already facing agrarian distress, and this could compound with a potentially deficient monsoon. The economy has to revive to increase purchasing power, and unless there is growth in aggregate demand, one cannot expect robust economic growth,” said U R Bhat, director at Dalton Capital Advisors.

The have been on a sticky wicket amid concerns over weak corporate fundamentals, the looming crisis in the non-banking financial companies (NBFC) sector, and the Indo-US trade tensions. Investors are also concerned over a slowdown in the economy and debt defaults. Market players said a rally in will depend on policy action by the government to revive growth and corporate earnings.

“The Indian have been on a slippery slope in the last several sessions, due to a liquidity crunch, tepid earnings growth, and corporate defaults. Thursday’s gain was a surprise relief rally following the Fed’s announcement. One cannot expect buoyancy in the market unless these underlying issues are resolved,” said Siddhartha Khemka, head research (retail), Motilal Oswal Financial Services.

Foreign portfolio investors (FPI) sold shares worth Rs 731 crore on Friday, while domestic investors were buyers to the tune of Rs 445 crore, showed provisional data by the bourses. Of the 19 sectoral of the BSE, all but two ended Friday’s session in the red, with the BSE Auto Index declining the most.

All components, barring five, declined. YES Bank, and declined the most at 4.36 per cent and 3.39 per cent, respectively.

rose 1.28 per cent, while made marginal gains.

First Published: Sat, June 22 2019. 00:06 IST