Global cues such as US interest rate hike, along with concerns over slowdown in global growth and threat of a partial US government shutdown, dragged the key domestic equity indices into the red during the just concluded week.
The massive selling on Friday was triggered by a downturn in global markets and profit booking in the financials, IT and auto stocks. It came a day after major domestic indices snapped its seven-consecutive sessions' winning streak.
The equity market had begun the week on a positive note led by a strong rupee backed by narrowing trade deficit and inflow of foreign funds.
"Markets ended with losses this week after a sharp fall on Friday which wiped out
the gains seen during the early part of the week," said Deepak Jasani, HDFC Securities' Retail Research Head.
Consequently, the S&P BSE Sensex lost 220.86 points, or 0.61 per cent, to close at 35,742.07, whereas the 50-share Nifty of the NSE declined 51.45 points, or 0.47 per cent, to settle at 10,754.
"Drop in oil prices, strengthening rupee and pick-up in domestic macros provided positive momentum to the market. However, concerns over global economy growth and threat of partial US government shutdown triggered sell-off in global market," Geojit Financial Services Head of Research Vinod Nair said.
"Global market was influenced by FOMC downward revision in US GDP growth to 2.3 per cent from 2.5 per cent in 2019. US Fed slashed the interest rate hike trajectory for CY19 to two from four in 2018, which is positive for emerging market."
Besides indices, the local currency followed a similar trajectory in the past week, nonetheless, it strengthened by 1.75 to 70.15 against the US dollar from its previous week's close of 71.90.
"Indian markets started the week on a positive note due to gains from declining oil prices, increased open market operations by RBI to improve liquidity in the system and government measures to recapitalize public sector banks," said Essel Mutual Fund CIO Viral Berawala.
The government on Thursday had announced fund infusion of Rs 83,000 crore in PSBs by March 2019, which pushed the PSU Bank Nifty index into the green during the initial trading session.
However, the sector-based index ended in the red -- down 0.52 per cent -- as it succumbed to the overall negative trend in the market.
In terms of investments, foreign institutional investors (FIIs) were net buyers during the week under review as they bought a total of Rs 1,040.72 crore worth of shares, whereas domestic institutional investors (DIIs) off-loaded scrip worth Rs 1,141.49 crore, provisional data from the BSE showed.
"Nifty ended with W-o-W losses of 0.48 per cent. Market breadth was positive in four out of the five trading sessions of the week. Among sectors, power, PSU, oil and gas and
metals were major gainers while IT and consumer durables were large losers," Jasani said.
The top gainers on the BSE and the NSE were Power Grid which gained 6.15 per cent and Tata Motors which was up by 5.39 per cent. NTPC, Tata Motors(DVR), Asian Paints and Mahindra and Mahindra gained in the range in 3 to 5 per cent.
In contrast, export oriented IT stocks lost the most, owing to the weakness in the US dollar after the Fed rate hike. Infosys lost 8.48 per cent followed by TCS which declined by 4.62 per cent and Wipro a little over 4.10 per cent.
Other major losers were Bharti Airtel, Hindustan Uniliver and Adani Ports -- all in the range of 2 to 4 per cent.