 "Benchmark indices Sensex, Nifty decline after four weeks of gains")
Equity benchmarks ended the week with minor losses amidst profit booking and selling by foreign portfolio investors (FPIs). The Sensex ended Friday’s session at 66,160 points, a decline of 106 points or 0.2 per cent. The Nifty ended the session at 19,646 points, a drop of 14 points or 0.07 per cent. Sensex declined by 0.8 per cent for the week and Nifty by 0.5 per cent. The broader markets maintained their winning momentum with the Nifty Midcap index gaining 1.52 per cent and the Nifty Smallcap index rising 0.6 per cent. The Sensex and the Nifty had gained about 6 per cent in the preceding four weeks.
“The domestic market passed through a volatile week, with the benchmark index underperforming its broader peers. The recent correction of the domestic market can be attributed to several headwinds, including mixed Q1 results, a reversal in FPI activity, a rising dollar index & US bond yields, and an increase in crude oil prices,” said Vinod Nair, Head of Research, Geojit Financial services.
This week, the US Federal Reserve and European Central Bank (ECB) raised their benchmark rates and were ambiguous about the future of rate hikes.
Besides rate hike uncertainties, recent earnings disappointments and FPI selling have also weighed on investors' minds. On Friday, FPIs were net sellers to the tune of Rs 1,024 crore, extending their two-day selling to Rs 5,000 crore. So far in July FPIs have been net buyers to the tune of Rs 45,365 core, according to data from NSDL. From now on, the remainder of the quarterly results will likely determine the market trajectory.
"The recent dip in the market indicates a healthy correction citing the pace of decline and intermediate buying across sectors. And, Nifty has almost reached closer to the upper band of 19,300-19,500 support zone, offering opportunity for fresh positional longs in the index," said Ajit Mishra, SVP-technical research, Religare.