 "Share movement")
Indian markets fell more than 1% on Friday, along with most global markets, on concerns over stability in Europe and outlook for the US economy. Investors also remained cautious before the release of US jobs data and an Italian referendum on reforms.
The benchmark Sensex ended at 26,230.66, down 330 points, or 1.24%, the biggest fall since November 21. The Nifty 50 index declined 106 points, or 1.3% to end at 8,086.8.
“Markets ended on a weak note, dragged down by concerns over the Italian referendum and the US non-farm payrolls data. US bond yields continue to remain at elevated levels and this has kept the sentiment cautious,” said Dipen Shah, senior vice-president, Kotak Securities.
Foreign investors sold shares worth Rs 190 crore on Friday, provisional data provided by stock exchanges showed. Domestic investors, too, were net sellers to the tune of Rs 419 crore.
Share movement
Asian Paints dropped 3.7% and was the worst-performing stock on the Sensex, followed by Maruti Suzuki and Tata Motors. Maruti Suzuki India fell 3.4%, the most in two weeks, while Tata Motors fell 3.4% to Rs 433, the lowest level in six months.
Banking stocks, too, saw sharp declines; but, they recouped some of their losses after the Reserve Bank of India announced the market stabilisation scheme (MSS).
“Hopes of a rate cut by RBI in the upcoming policy meet capped the slide and MSS triggered a rebound,” said Jayant Manglik, president-retail distribution, Religare Securities. “Several important events and data are lined up ahead so volatility is here to stay. Needless to say, decline could be steep in the cash segment, so maintain extra caution,” he said.
Markets next week will react to US jobs data, which would provide more clues on the pace of interest-rate increases in the US. Investors will also eye developments in Italy, which heads to the polls on Sunday to pass or reject reforms that Prime Minister Matteo Renzi says are needed to move the country forward. RBI’s policy review on December 7 will also be a focal point for investors reeling from the government’s clampdown on high-value currency bills and capital outflows. Also, the US Federal Reserve’s two-day rate setting meeting starts December 13, where it is widely expected to increase rates.
“There’s a lot of uncertainty in the markets and investors will react to upcoming events in the absence of any positive triggers. Indian stocks will remain volatile for the next three-six months,” said Neil Parikh, chairman and chief executive officer at Parag Parikh Financial Advisory Services.
The Sensex trades at 15.4 times 12-months’ projected earnings, compared with the MSCI Emerging Markets Index’s multiple of 11.8.
