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Fears over corporate earnings numbers and hiccups in the ongoing Parliament session affected market sentiment on Friday, leading to a consecutive day of decline in the benchmark indices.
India was also affected by negative cues from the Asian markets, trading lower due to disappointing Chinese manufacturing data.The BSE exchange's benchmark Sensex ended at 28,112, down 0.9 per cent or 258 points. The National Stock Exchange's Nifty closed for the day at 8,521, down 0.8 per cent or 68 points.“The market is slightly cautious and nervous. Corporate results so far have not sprung any positive surprises. The Parliament session is being keenly watched but even the adjournments there have been worrying investors,” said Alex Mathew, head of research, Geojit BNP Paribas Financial Services. ICICI Bank and infrastructure giant Larsen & Toubro are to announce their June quarter numbers next week. Analysts said in view of the unimpressive numbers announced by other large-cap index names, the expectation was that this results season was unlikely to show recovery.
Repeated adjournments of the Parliament sessions has investors worried about the progress of reform measures such as the national goods and services tax, say experts. Slow onset of the monsoon is another factor keeping investors nervous, they said.
“Participants are keenly eyeing some trigger for the next directional up-move but a deteriorating monsoon, lack of any major positive surprise from the earning front and indecision over key bills in the Parliament session, is keeping the uncertainty intact,” said Jayant Manglik, president, retail distribution, Religare Securities.
Stocks of the banking and metal sectors were the worst performers, their indices falling 1.2 per cent each. ICICI Bank fell the most, down 3.9 per cent. State Bank of India was down 2.2 per cent and YES Bank by 1.9 per cent. Market experts said traders were not creating additional positions in the sector because the Bank Nifty is trading below key technical levels. The metal sector fell on weakness in Chinese manufacturing on worry regarding a drop in demand. Jindal Steel shed 3.6 per cent, followed by Vedanata and Tata Steel, down 2.2 and 1.9 per cent, respectively. Foreign portfolio investors (FPIs) were net buyers at Rs 6.6 crore on Friday and domestic institutions by Rs 196 crore.
“FPIs are not willing to create positions at this point because of the uncertainty on corporate earnings and also because of the futures and options expiry next week. They have been sellers in the index futures market,” said Mathew.
