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Benchmark share indices declined 1-1.5 per cent after the sharp slide in crude oil prices raised global growth concerns and the political uncertainty in Greece also weighed on investor sentiment.
For the week ended January 9, the 30-share BSE Sensex closed with a loss of 430 points, or 1.54 per cent, at 27,458, while the National Stock Exchange 50-share Nifty closed at 8,285, lost 111 points, or 1.32 per cent.
Among broader markets, BSE Midcap and Smallcap indices ended lower by almost 1 per cent.
Further, the rupee recorded its biggest weekly gain since May last year, closing at 62.33 a dollar, riding high on hopes that demand for emerging-market assets will be sustained amid the prospect of future euro-area stimulus.
On the global front, oil markets resumed their slide on Friday, with Brent and US crude hitting April 2009 lows and ending down for a seventh straight week, although prices recovered from their lows after a sharp drop in the US oil rig count.
The price of Brent Crude fell below $50 a barrel for the first time since May 2009. Oil extended losses amid speculation that US inventories will expand, deepening a global supply glut that’s driven prices to a five-year low.
Globally, traders turned risk averse over apprehensions of Greece, defaulting on its loans and losing its status as a Euro zone country, which became more pronounced with the leftist Syriza Party, committed to roll back austerity measures, emerging as the front-runner for the January 25 election.
Back home, the Sensex posted its seventh biggest single-day fall in history on Tuesday and the Sensex lost 856 points to settle at 26,987. It was the steepest fall since July 2009.
However, later in the week markets snapped their three-day losing streak and indices gained over 1 per cent. On Friday, markets ended marginally positive after IT majors Infosys announced better-than-expected third quarter earnings.
The BSE Metal Index was the top loser during the week. Sectors like Power, Realty, Banks and Capital Goods dipped between 1-2 per cent. However, BSE FMCG index surged by one per cent followed by IT, which ended marginally higher.
Coal India fell 1.6 per cent as production and dispatches were affected by the workers’ strike on Tuesday.
Bank stocks also remained under pressure in the absence of any significant reform centric announcements during the two-day banking conclave which was held in Pune and attended by the prime minister, RBI governor and top officials from the banking and insurance sector. Axis Bank, SBI and ICICI Bank slipped between 4-6 per cent.
However, Morgan Stanley maintained an “overweight” on Axis Bank.
Auto shares were mixed during the week as sales data for December came in during the week. Maruti Suzuki gained over 3 per cent. The company reported 21 per cent growth in sales during December 2014 compared to the same month last year. Also, CLSA has retained Maruti Suzuki as top auto pick in 2015 citing new products, improvements in pricing and large margin expansion of yen among other factors which are likely to help the company to reap larger profits in 2015.
WEEK AHEAD
Trend in global markets, third quarter earnings, domestic and global macro economic data, investment by foreign portfolio investors (FPIs), the movement of rupee against the dollar and crude oil price movement will dictate the trend.
Companies like YES Bank, Bajaj Auto, TCS and Axis Bank will unveil their third quarter earnings.
On the macro economic front, the government will release the November IIP and December CPI numbers on Monday.
