Indian equity benchmarks registered a second straight weekly loss on Friday. The International Monetary Fund lowered its growth forecast for India, denting investors' sentiment, but a surge in metal shares and a rebound in global equities following dovish commentary from the Federal Reserve kept losses on Dalal Street in check.
For the week, the S&P BSE Sensex index lost 388.96 points or 0.73 percent to end at 52,586.84 while the broader NSE Nifty50 declined to 15,763.05, down 93.00 points or 0.59 percent.
During the week, the IMF cut its forecast for India's GDP growth for FY22 to 9.5 percent from 12.5 percent.
The US central bank kept key policy rates unchanged after a scheduled review as widely expected, and maintained that the world's largest economy remains on track despite a spike in Covid cases.
It, however, offered no clues on when it will start tightening its easy monetary policy that it introduced in 2020 to tackle the economic fallout from the pandemic.
"During the week, investors’ sentiments drifted to an all-time low when the IMF lowered India’s FY22 GDP forecast, emphasizing sluggish revival of our economy on the back of a voracious second wave (of infections) and an obtuse inoculation drive. A depreciating rupee and higher oil prices could also be near-term overhangs for the market," said Nirali Shah, Head of equity research, Samco Securities.
"However, given that lower interest rates are positive for equities, any fragility in the market should be taken as a healthy correction as well as a great buying opportunity for long-term players," she said.
Among the sectors tracked by NSE, the metal index stole the show with a gain of 7.78 percent — its best week in three months. Strong quarterly results and hopes of increased demand on the back of strong infrastructure spending boosted metal shares.
IT indices jumped while private bank and automobile barometers suffered weekly losses.
"The market remained rangebound for yet another week amid mixed cues... Among sectors, banking continues to underperform. Auto witnessed selling pressure owing to subdued results from the likes of Maruti Suzuki and TVS Motor," said Ajit Mishra, VP Research. Religare Broking.
The Nifty Bank index fell for a second straight week — its biggest two-week dive In nearly four months.
"The Nifty50 index has been consolidating in a range of 15,450-15,900 for the last two months, and the trend may endure until we see alignment between Nifty50 and the banking index. While index majors from other sectors are helping the index to hold at higher levels, participation of the banking pack is critical for any sustainable directional move," he said.
Among the 21 gainers in the Nifty50 universe, Hindalco, Tata Steel, Sun Pharma, Bajaj Finserv and Tech Mahindra were the top performers, gaining between 6.78 percent and 14.31 percent for the week.
On the other hand, Dr Reddy's (ending 13.12 percent lower), Axis Bank (7.87 percent) and Asian Paints (4.15 percent) were the top laggards.
Mixed earnings from blue-chip companies also kept investors on the back foot.
Broader indices outperformed the headline gauges, as Nifty Midcap and Nifty Smallcap rose 0.84 percent and 1.11 percent respectively. Trident, Nalco, Century Textiles, SAIL, Balrampur Chini and SRF — finishing between 9.58 percent and 17.33 percent for the week — were among the top gainers.
On the other hand, Alembic Pharma, Suzlon Energy, Intellect Design, Firstsource, Symphony and Indiabulls Real Estate — declining between 10.91 percent and 16.80 percent — were the top losers.
First Published: IST