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Profit booking continued for another day of trade on Friday. The Nifty closed below the 8250 level (important support level) weighed by oil and mining stocks. The slide in European markets after International Energy Agency cut 2015 oil demand growth forecast also dampened sentiment on the street.
The 30-share BSE Sensex declined 251.33 points to close at 27350.68 and the 50-share NSE Nifty fell 68.80 points to 8224.10 while the broader markets underperformed equity benchmarks. The BSE Midcap and Smallcap indices were down 1.3 percent and 1.5 percent, respectively.
It was just a profit booking triggered due to global growth worries post fall in crude oil prices, but there is no fundamental weakness as such, feel experts who advise sticking to quality stocks.
“The market is concerned about a global slowdown, as reflected in demand from major oil producing organisations. Markets were also cautious ahead of the inflation and IIP data scheduled post-market today,” said Dipen Shah, Head- Private Client Group Research, Kotak Securities.
Meanwhile, Raamdeo Agarwal of Motilal Oswal said the Indian markets have risen 100 times in the last 30 years and there is nothing stopping India from seeing exponential growth in the next 25 years. He advises holding onto quality names as quality and growth together will lead to exponential gains.
For the week, the Sensex crashed 4 percent and Nifty fell 3.7 percent while the CNX Midcap and BSE Small Cap indices were down over 3.5 percent. BSE Realty, Capital Goods, Oil & Gas, Metals, Power, and IT slipped 4-7 percent.
Globally, Asian markets mostly closed higher on positive US cues overnight and hopes of stimulus post soft economic data despite fall in crude oil prices. European markets like CAC, DAX and FTSE were down 1 percent each led by fall in oil and metals stocks.
Brent crude hit a five-and-half-year low of USD 63 a barrel on a supply glut, down 1 percent today and down 45 percent compared to USD 115 a barrel in June.
International Energy Agency (IEA) cut 2015 oil demand growth estimates by 2.3 lakh barrels oil per day (bpd) today to 9 lakh bpd following sharp fall in crude oil prices. It was the fourth time cut in oil demand in last 5 months. According to IEA, oil price rout will not hit production.
On the home turf, Lok Sabha has passed Coal Mines Bill today. Meanwhile, Finance Minister Arun Jaitley said the government will introduce Goods & Services Tax bill in next session of parliament. “We will try to pass Insurance Amendment Bill next week. In fact, we are working overtime to push reforms in Insurance, Coal Bill,” he adds.
RBI Governor Raghuram Rajan said, “Make for India is as important as Make in India.” He advises against an export-led policy for India. Speaking on inflation, the RBI governor said the path of disinflation cannot be very steep for India.
BSE Oil & Gas fell the most among sectoral indices, down 2.6 percent followed by Capital Goods with a 2 percent fall. Metal and Power were down 1.4 percent each.
Gail India topped the selling list in the Sensex, down 4.6 percent. ONGC and Cairn India plunged 3.55 percent, and Reliance Industries slipped 2.5 percent.
Among metals, Tata Steel cracked 4 percent. Sesa Sterlite and Hindalco Industries were down 1-3 percent. Capital goods majors Larsen & Toubro and BHEL declined 1.9 percent and 2.9 percent, respectively.
Housing finance company HDFC, banking majors State Bank of India and Axis Bank slipped 1-2 percent followed by ICICI Bank and HDFC Bank with marginal loss.
Software services exporter TCS lost 1.5 percent. In an analysts’ meet held after market hours, the company said Q3FY15 revenue will reflect the negative impact of seasonality, expecting a weak quarter from BFSI. However, the company maintained target margin band of 26-28 percent.
However, Infosys, Maruti Suzuki and Sun Pharma bucked the trend, up 0.8-1.3 percent. Bharti Airtel gained 1.2 percent as the defence ministry agreed to release 5 MHZ of spectrum in the 2100 MHZ which is likely to be auctioned next year.
In the broader space, Jet Airways, Sun TV, Bajaj Hindusthan, Suzlon Energy, India Cements, Havells India, GMR Infra, Unitech, Opto Circuits and Sintex Industries were down 5-9 percent. However, Tata Sponge, Tata Metaliks, KPIT Tech and Bombay Dyeing gained 2-11 points.
About 922 shares advanced while 1987 shares declined on the Bombay Stock Exchange while nearly four shares declined for every share advancing on the National Stock Exchange.