The 30-share Sensitive Index of the Bombay Stock Exchange slipped below 35,000-mark and the 50-share Nifty of the National Stock Exchange struggled to stay above 10,600-level amid continuing sell-off by traders in Dalal Street on Friday regardless of acceleration in Nikkei IHS Markit’s service sector PMI or Purchasing Managers Index to three-month high of 51.4 as well as improved performance by corporate India and the financial sector in January-March quarter.
The domestic market extended its loss for the second session in a row owing to overnight fall in United States shares in Wall Street and anxiety among investors over the US-China trade talks.
The Sensex ended for the week at 34,915.38 points, registering a decline of 187.76 points or 0.53 percent. The Nifty of NSE declined 0.57 percent or 61.40 points to end at 10,618.25 points. Despite several banking sector shares being subjected to profit-booking by speculators, the Nifty Bank gained on increases in private banks. It ended at 25,645.40 points, up 40.15 points or 0.16 percent.
The subdued sentiment, analysts say, was in line with other Asian markets which too were concerned about tariff stand-off between the world’s top two economies ~ the US and China. Global markets are keen on the outcome of trade talks between them.
The markets, however, appear to have factored in the rise in crude oil prices, albeit in short to medium term. Besides, analysts say, the US Federal Reserve failed to give a clear roadmap for its proposed interest rate increased in 2018.
Market participants, however, are expecting benchmarks to resume upside journey next week as they cited on Friday’s report by Nikkei IHS Markit on service sector PMI. The report by economist Aashna Dodhia said: “India’s dominant service sector accelerated in April on a pick-up in new businesses which in turn enabled firms to hire at the fastest pace in last seven years….it was encouraging to see that India’s service economy reports a positive start in April quarter with output growth gaining momentum as demand conditions improve… economy also saw price pressure moderating further with input and output charge inflation registering at the slowest since September 2017 and June 2017, respectively.”
Importantly, the report foresees the service sector contributing significantly to GDP growth in financial year 2018-19.Banking shares receded under selling pressure as the market looks forward to Monday’s release of earnings data by ICICI Bank that has been in news recently for several wrong reasons.
The stock has been fast losing its charm as investors for more than a month are reluctant to accumulate ICICI Bank shares. Brokerage Motilal Oswal expects the private lender’s bottom line to show a 32 percent drop.
Axis Bank, despite announcing weak numbers with net loss for Q4 for the first time, still enjoys “buy” tag of several brokers because the bank, according to them, has assured that for it “the worst is over” and asset quality is poised to make a sharp positive turnaround. Other private lenders such as Yes Bank, HDFC Bank and Kotak Mahindra Bank have satisfied market with their performances meeting estimates.
In the Sensex pack, seven shares ended up and 24 were down. For the Nifty, the advance-decline ratio stood at 11 versus 37, while two shares remained unchanged. Gainers in the BSE benchmark included HUL at Rs 1,468, up 0.90 percent; HDFC Bank at Rs 1,983.20, up 0.80 percent and Power Grid at Rs 207.95, up 0.68 percent.