Weekly roundup: Markets fall most in five weeks on FII outflows, GST woes

The benchmark indices Sensex and Nifty50 posted their biggest weekly fall in five weeks as market remained under pressure on account of foreign institutional investor (FII) outflows as worries over a faster pace of rate increase in US lingered on while back home the expected delay in the implementation of Goods and Services Tax (GST) kept investors on tenterhooks. 

During the week ended December 23, the S&P BSE Sensex lost 449 points down or 1.69% to settle at 26040.70, while the broader Nifty50 slipped 154 points, or 1.88%, to close at 7985.75. 

Broader market underperformed the headline indices. BSE Midcap index shed 3.88% to finish at 11760.78, while BSE Smallcap quoted 11796.94, down 2.61% for the week. 

“Conditions are not favourable for any fresh directional trades as we have already seen decent correction from the top and downside seems capped in Nifty from the current levels. However, negativity in the banking pack indicates further slide in days to come. Also, we have derivative expiry scheduled in the coming week. In short, we feel it's time to limit your positions and wait for clarity,” said Jayant Manglik, President, Retail Distribution, Religare Securities.

Sectors and stocks

The week saw all sectoral indices settling in red. BSE Healthcare index dropped 4.25%, followed by the BSE Metal index (down 4.22%), the BSE Bankex index (down 2.65%), the BSE FMCG (down 1.3%) and BSE Capital Goods (down 0.8%).  The BSE PSU, BSE Power and BSE Auto indices shed 2.01%, 1.79% and 1.73%, respectively. 

Among Sensex stocks, Axis Bank, Adani Ports and State Bank of India plunged 7.3%, 6.2% and 5.9%, respectively for the week. Tata Steel lost 5.7%, Bharti Airtel dipped 4.7%, while ONGC slumped 4.3%.

Gainers included Gail (India), Cipla and NTPC, which rallied 4%, 3% and 0.75%, respectively. HDFC Bank gained 0.46%, TCS 0.37%, and Maruti Suzuki added 0.18%. 

FII outflows exceed 26,000 crore in December quarter

FPIs have been net sellers of over Rs 25,000 crore in equities from October till December 22, data available with National Securities Depository Limited (NSDL) suggested. 

They sold an additional Rs 1,463 crore on Friday, provisional figures available with BSE showed, taking total net outflows to nearly Rs 26,500 crore. 

Uncertainty over GST remains 

The GST Council could not evolve a consensus on the issue of dividing the administrative powers between the Centre and states in its two-day meeting which concluded on Friday even as it cleared all other provisions of draft model GST Bill and whole of compensation Bill. The next meeting of the GST Council will take place on January 3 and 4.

Global Updates

Globally, the Bank of Japan maintained the 0.1% interest it charges on a portion of excess reserves that financial institutions park with the central bank. Geopolitical concerns following deadly incidents in Germany and Turkey also impacted sentiment through the week. Federal Reserve Chairwoman Janet Yellen's first speech after rate hike at Baltimore, where she spoke of strengthening US jobs market and wage growth, was also in focus. 

MARKET NEXT WEEK: The market will react to the outcome of GST Council meeting which concluded on Friday post market hours. Trading will also be influenced by December future & options contracts which expire on Thursday. 

“The rollovers to the January series have already hit 7 million. Normally, 7 million rollovers happen by the second last day of the expiry. The series may add another 6 million or so in Monday and Tuesday’s session. Therefore, market will have enough time to trade positively on Wednesday and Thursday. I believe the closing expiry will be on the higher side and Nifty will close above 8,200 on Thursday,” said Kishor Ostwal, CMD, CNI Research.