Sensex sheds 143 points but up for 4th week straight

Mumbai: Financials dragged benchmark Sensex lower on Friday as mixed global equities and another record surge in domestic coronavirus infections kept the sentiments cautious on Dalal Street. High probability of a washout quarter for Q1 corporate earnings also added to investors’ woes.

"Markets continued their volatile movements and ended the day negative, tracking mixed global cues. Global stocks were mixed following record infections in the US, which led to worries of delayed global economic recovery, while Indian markets worried about record cases of infections and increasing localized lockdowns,” Vinod Nair, Head of Research at Geojit Financial Services said.

However, on a weekly basis, the benchmark indices gained around 1.5 per cent. The weekly gains were mainly driven by liquidity and the hope that the virus would be contained soon and businesses will go back to normal.

“However, the outlook for the market is volatile as the earnings announcements have begun after a washout quarter for most industries,” said Nair.

Foreign portfolio investors (FPIs) sold equities worth $261 million over the past five trading sessions while domestic institutional investors (DIIs) sold $106 million worth of equities in the same period.

“We are now beginning to see some fatigue coming into the market as reflected by the selling by FPIs and DIIs,” said Sanjeev Zarbade, VP-PCG Research, Kotak Securities. “Also, the ongoing earnings season will be one of the weakest in many years. In view of this, for short term investors, it makes sense to remain cautious,” said,” he added.

Sensex dropped 143 points to close at 36,594 while peer Nifty shed 45 points to end at 10,768.


For the week, the two indices rose 1.59 per cent and 1.51 per cent, respectively. It was the fourth straight week of gains for the benchmarks as they logged their longest weekly winning streak since December.

On Tuesday, 21 of 30 Sensex stocks closed lower. Mortgage lender Housing Development Finance Corporation (HDFC) contributed the most to the benchmark’s decline and dropped 2.87 per cent. Top private lender HDFC Bank shed 1.81 per cent.

Peers ICICI Bank, Axis Bank and Kotak Mahindra Bank dropped 2.75 per cent, 3.14 per cent and 1.36 per cent, respectively.

Meanwhile, gains in index heavyweight Reliance Industries (RIL) limited the losses for Sensex. The stock logged a new high of Rs 1,884.40 after the oil-to-telecom conglomerate said late on Thursday that it has launched a fuels and mobility joint venture with global energy major BP. The stock closed 2.95 per cent higher at Rs 1,878.50.

Top software exporter Tata Consultancy Services (TCS) rose 0.78 per cent even as the company reported 13.8 per cent decline in June quarter net profit, as investors focused on management commentary that the company may see revenue growth from next quarter onwards.

The bears were back on the forefront, as losers beat gainers in the ratio of 1.7:1 on the BSE. BSE mid and smallcap indices dropped 0.72 per cent and 0.35 per cent, respectively.

BSE Bankex was the top sectoral loser as it shed 2.22 per cent, while BSE Finance followed next with a 1.95 per cent decline. BSE Energy, on the other hand, was the top gainer as it advanced 2.29 per cent.

YES Bank shed 4.32 per cent after the private lender, which is in process of launching its follow-on public offer (FPO) to raise Rs 15,000 crore, fixed the floor price at Rs 12 per share, a discount of 55 per cent against the previous session’s closing price.

Firstsource Solutions jumped 7.32 per cent after ace stock picker Rakesh Jhunjhunwala increased stake in the company to 2.88 per cent during the April-June quarter from 2.06 per cent earlier.

Punjab National Bank dropped 5.53 per cent after the country’s second-largest lender declared its Rs 3688 crore exposure to bankrupt mortgage lender Dewan Housing Finance Ltd (DHFL) as a fraud.

Markets at a glance

• Sensex, Nifty gain 1.59%, 1.51% for the week
• Sensex drops 0.39% or 143 points to close at 36,594
• Nifty sheds 0.42% or 45 points to close at 10,768
• 21 of 30 Sensex stocks close lower
• Top Sensex losers: Axis down 3.14%, IndusInd 3.13%, Titan 3.01%
• RIL top Sensex gainer, records new high on JV launch with BP
• Other Sensex gainers: Sun Pharma up 2.36%, HUL 2.22%
• Bears in charge; advance-decline ratio at 1:1.7
• BSE Midcap index down 0.72%, Smallcap 0.35%
• BSE Bankex top sectoral loser, drops 2.22%
• City Union, RBL Bank top losers in BSE Bankex
• BSE Finance index down 1.95%; PNB sheds 5.53%, Max Ventures 5.20%
• BSE Energy top gainer, up 2.29%; Gujarat Gas up 6.22%, RIL follows next
• YES Bank drops 4.32%; FPO floor price fixed at Rs 12 per share
• PNB drops 5.53% on declaring DHFL exposure as fraud
• Firstsource jumps 7.32% as Jhunjhunwala hikes stake in Q1

Who moved my market

• Weak June quarter earnings

Companies are likely to report the weakest quarterly earnings in a long time in the June quarter, due to the coronavirus pandemic-induced lockdown.

• Mixed world equities

Asian shares and US stock futures fell on Friday as record-breaking new coronavirus cases in several U.S. states stoked concern about economic recovery, while investors looked forward to earnings season, Reuters reported. Italian stocks pulled Europe out of early losses on Friday as data pointed to a strong rebound in May industrial output, but a spike in coronavirus cases globally continued to weigh on investor sentiment, a Reuters report said. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.74 per cent, while the pan-European STOXX 600 rose 0.4 per cent by 0829 GMT.

• Another record surge in coronavirus cases

India witnessed a record 26,506 new coronavirus cases in the last one day, taking the total to 7,93,802 confirmed Covid-19 cases . A total of 475 deaths were reported in last one day, taking the total number of fatalities to 21,604.

What to watch out for

• The continuous record surge in new coronavirus cases is a major cause of concern.

• The direction of global markets will be closely watched as the domestic market tends to follow suit.

• Progress on a domestic as well as overseas vaccine for Covid-19 treatment will be closely watched.

• The June quarter corporate earnings season has started and it will provide a better picture of the damage caused by the pandemic-induced lockdown.

• The data of Index of Industrial Production (IIP), which is scheduled to be released later in the day will be in focus.