 "Weekly: Indices fall 2% tracking global cues; Q4 earnings to dictate trends")
Fall in crude oil prices, mixed economic data from major economies along with uncertainty over rate hike by the US Federal Reserve kept Indian equity markets in check for the second straight week.
Investors’ attention now has shifted to fourth-quarter earnings starting next week after the market discounted Reserve Bank of India (RBI)’s interest rate cut, which was widely expected. For the week ended April 8, the BSE Sensex lost 596 points, or 2.4 per cent, to end at 24,674, while the Nifty dropped 158 points, or 2.1 per cent, to close at 7,555.
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The broader markets outperformed benchmark indices with the BSE Midcap index dropping 0.5 per cent and Smallcap index ending 0.23 per cent higher.
“RBI’s policy actions were on expected lines, with a 25 bps (basis points) rate cut. We believe the measures are positive for the fixed-income market. In the near-term, the equity markets are likely to remain lack-lustre as the earnings season kicks in. Going into May, the global markets will look to further actions by the Fed, European Central Bank and the outcome of the referendum in the UK regarding the European Union. Hence, we might see volatility. Investors should not get swayed by these swings and focus on fundamentals of individual stocks,” said Mihir Vora, director and chief investment officer at Max Life Insurance.
Foreign institutional investors (FIIs) were net sellers in equities to the tune of Rs 1,352 crore till April 7, according to provisional stock exchange data.
Stocks in action
Adani Ports was the top loser during the week, falling by almost 10 per cent.
Maruti Suzuki lost eight per cent on reports that a foreign brokerage had cut target price on the stock.
Financial shares declined on profit booking after RBI reduced the repo rate by 25 bps. Axis Bank, PNB, ICICI Bank, Federal Bank, State Bank of India and bank of Baroda lost up to eight per cent. ITC slumped four per cent, HDFC slipped three per cent. BHEL rose nearly five per cent Lupin surged five per cent after its US-based subsidiary Lupin Pharmaceuticals launched the first product from its GAVIS pipeline.
Week ahead
Investments by FIIs , trends in global markets will be the key drivers of the market. On account of Ambedkar Jayanti and Ram Navami markets will remain shut on Thursday and Friday.
On Tuesday, the government will announce index of industrial production data for February and the consumer price index data for March 2016.
And, on Friday the results season starts with Infosys announcing its numbers.
