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After a positive start, the markets were unable to hold on to their gains as all round selling in scrips across the sectors dragged the indices sharply. The 30-share Sensex ended 348 points lower and the 50-share Nifty was down 107 points at 25,228 and 7,542 levels, respectively.
"Markets ended the week with a big fall on Friday. Crude price concerns caused by the geo-political concerns in Iraq marred sentiments in the markets. Several stocks, which have had a heady run over the past few weeks, fell sharply on profit-booking," said Dipen Shah, Head- Private Client Group Research, Kotak Securities.
Adding: "The markets have run up sharply over the past few months. Going ahead, We see the monsoon progress and the budget to be the two important triggers for the markets. We feel that, a progressive budget as well as other reform initiatives will likely lead to continued outperformance of Indian indices v/s emerging market peers. However, if there is a continued rise in crude price, it will be a negative from the CAD, rupee and inflation perspective.”
Shares of mid-and small-cap companies also came under pressure after oil prices hit their highest level in nearly nine months, as escalating civil war in Iraq hit risk appetite. BSE Mid-cap and BSE Small-cap lost 2.5% and 3.1%, respectively.
Axis Bank, Hero MotoCorp, Tata Steel and NTPC were among the top Sensex losers that slipped over 4%. Hindalco, Gail (India), State Bank of India (SBI), Tata Power and Maruti Suzuki also lost considerable ground.
Global Markets
In other Asian markets, Japan's Nikkei average bounced off a two-and-a-half week low struck in early trade on Friday, spurred by reports that Prime Minister Shinzo Abe plans to announce the policy regarding a cut in the corporate tax rate later in the day.
The Nikkei rose 0.8% to 15,097.84, after earlier falling to 14,830.99, the lowest since June 2. For the week, the index added 0.1%, posting a fourth consecutive weekly gain.
Shares in China and Hong Kong rose on Friday, led by strong gains in the banking sector after data showed China's new bank lending and money supply rose faster than expected in May, adding to hopes that the economy was stabilizing.
British property companies led a pullback in European indexes on Friday after the Bank of England (BoE) flagged concerns about loose mortgage lending and raised the prospect of a rate hike Violence in Iraq hit broader market sentiment and boosted oil prices, with airline stocks among the worst hit while shares in oil majors gained.CAC, FTSE and DAX have lost 0.6%, 0.7% and 0.8%, respectively.
Crude on the boil
Brent crude climbed to nine-month high to nearly $115 a barrel on Friday, as supply disruption fears took centre stage after the United States threatened military action in Iraq against Sunni Islamist militants who are pushing on towards Baghdad.
Brent hit a session high of $114.69 a barrel, highest since September 2013. It was up $1.57 to $114.59 by 0754 GMT. It ended up with gains of more than $3 on Thursday. US crude touched an intraday high of $107.68, also a nine-month high, and was up 97 cents at $107.50, extending the previous session's $2.13 gain.
Sectors & Stocks
Among individual stocks, HeroMotoCorp, ADF Foods, Edelweiss Financial, HDFC Bank and Saregama India were some of the news-based buzzing stocks of the day.
Shares of all three listed state-owned oil marketing companies – Bharat Petroleum Corporation (BPCL), Hindustan Petroleum Corporation (HPCL) and Indian Oil Corporation (IOC) – lost 5-8% amid fears of a rise in under-recoveries given the rising crude oil prices.
Among sectors, the S&P BSE Metal index and the S&P BSE Consumer Durables index were the top losers that lost over 3% each. SAIL, NMDC, Tata Steel, Hindalco, Hindustan Zinc, Gitanjali Gems, VIP Industries, PC Jeweller, Videocon and TTK Prestige were the key losers in these sectors.
