Mumbai: Finally, the market cracked the impressive eight-week record setting-run, thanks to the much awaited Union Budget, the Sensex were severely beaten to tumble 983.69 points to finish at 35,066.75 and the broder Nifty slid well below the key 11,000-mark at 10,760.60.
The key indices resumed the record-setting cycle
Monday following the upbeat economic survey tabled in Parliament ahead of the budget reiterating India would be the world fastest growing economy with GDP estimates of 7-7.5 per cent 2018-19, giving fresh impetus to investor sentiment.
It was shortlived, as the anxiety ahead of Union-
Budget and subsequent tabling brought-out big disappointment as far as investors is concerned, while it was nothing short of blood-bath in Dalal-street as Bears gained upper-hand.
Investor expectation of good balance between fiscal discipline amid growth withered on budget proposals tabled in the Parliament by finance minister Arun Jaitley.
The budget proposals of 10 per cent long term capital gains tax on equities and overshooting of fiscal deficit target quashed investor optimism.
The volatility in rupee and bonds over fiscal slippage along with primary concern over further rise in inflation amid RBI taking more hawkish tone in upcoming monetary policy meet led to the market turmoil.
The Sensex started the week higher at 36,106.36 and hovered between all-time record high of 36,443.98 before budget and subsequent tumble after the budget at 35,006.41, it closed the week at 35,066.75, showing a slump of 983.69 or 2.73 per cent. (The Sensex garnered 3,578.59 points or 10.90 per cent during past eight week sessions).
The Nifty also resumed the week up at 11,079.35 and marked all time high of 11,171.55 and later to a low of 10,736.10 before ending the week at 10,760.60, showing a fall of 309.05 points, or 2.79 per cent.
All the sectoral indices got severely punished led by
Realty, Consumer Durables, HealthCare, PSUs, Power, Metals, Banks, Oil&Gas, Capital Goods, FMCG, IPOs, Teck, Auto and IT sectors.
The broader midcap and small cap shares also took a heavy hammering.
Meanwhile, foreign portfolio investors (FPIs) and foreign institutional investors (FIIs) bought shares worth Rs 2,526.97 crore during the week, as per Sebi’s record including the provisional figure of Friday.
The S&P BSE Mid-Cap index dropped 1266.49 points or 7.10 per cent to settle at 16,574.70. The S&P BSE Small-Cap index dropped 1494.65 points or 7.73 per cent to settle at 17,847.53. Both these indices underperformed the Sensex.
Among sectoral and industry indices, realty fell by
8.53 per cent followed by consumer durables 7.10 per cent, healthcare 6.40 per cent, PSU 5.25 per cent, power 5.04 per cent, metal 4.28 per cent, bankex 3.77 per cent, oil&gas 3.53 per cent, capital goods 3.37 per cent, FMCG 2.30 per cent, IPO 2.16 per cent, teck 2.01 per cent, auto 1.78 per cent and IT 1.53 per cent.
Among the 31-share Sensex pack, 24 stocks fell and remaining 7 stocks rose during the week.
Dr Reddy was the top Sensex loser last week. The stock fell by 15.25 per cent while Tata Steel lost 12.91 per cent. The company announced at the fag end of the trading session Friday that it concluded the acquisition of 74 per cent stake in Bhubaneshwar Power (BPPL) from JL Power Ventures for Rs 255 crore.
It was followed by Axis Bank 7.95 per cent, Bharti
Artl 7.69 per cent, ONGC 7.59 per cent, ICICI Bank 6.56 per cent, Tata Motors DVR 6.16 per cent, Reliance 6.10 per cent, SBI 5.19 per cent and Sun Pharma 5.09 per cent.
However, Auto major Mahindra & Mahindra (M&M) rose 1.73 per cent. The company said its total auto sales rose 32 per cent to 52,048 units in January 2018 over January 2017.
Domestic sales rose 33 per cent to 49,432 units while exports rose 15 per cent to 2,616 units in January 2018 over January 2017.
Hero MotoCorp rose 1.51 per cent. The company announced during trading session Friday that its total sales rose 31 per cent to 6.41 lakh units in January 2018 over January 2017.
It was followed by Indus Ind Bank 1.33 per cent, TCS
1.00 per cent and HUL 0.20 per cent.
The total turnover during the week on BSE rose to Rs 28,417.75 crore as against last weekend’s level of Rs 22,625.37 crore and NSE moved up to 1,96,972.94 crore compared to Rs 1,66,288.96 crore previously.
Gold posts eighth weekly gain
A Diverging trend emerged at the bullion market during the week with gold registering its eighth weekly gain and silver drifting lower.
The yellow metal gained on sustained jewellery stockist and retailers offtake even as the metal weakened overseas.
Demand for physical gold improved this week as
jewellers resumed purchases after the government kept import taxes on the precious metal unchanged in its budget proposals.
Silver drifted lower due to reduced offtake by industrial units and coin makers.
The white-metal lost 1.24 per cent or Rs 495 this week.
In worldwide trade, gold futures ended lower, down more than 1 per cent for the week, after a stronger-than expected US jobs report drove up the dollar and Treasury yields as the data laid some groundwork for a potentially more aggressive Federal Reserve interest-rate response this year.
April gold shed USD 10.60, or 0.8 per cent, to settle at USD 1,337.30 an ounce, building a total loss of roughly 1.5 per cent for the week.
March silver dropped 44.6 cents, or 2.6 per cent, to USD 16.709 an ounce. It logged a 4.2 per cent weekly decline.
In the New York Comex trade, gold for April delivery dropped to settle at USD 1,337.30 an ounce compared to last weekend’s close of February USD 1,352.10, while March silver contract fell to end at USD 16.709 an ounce from March USD 17.441.
On the domestic front, standard gold (99.5 purity) resumed lower at Rs 30,205 per 10 grams from last Friday’s closing level of Rs 30,445, it hovered between Rs 30,555 and Rs 30,145 before settling at Rs 30,485, revealing a rise of Rs 40, or 0.13 per cent.
Pure gold (99.9 purity) also commenced lower at Rs
30,355 per 10 grams compared to preceding weekend level of Rs 30,595, it traded between Rs 30,705 and Rs 30,295 before closing at Rs 30,635, showing a gain of Rs 40, or 0.13 per cent.
Silver ready (.999 fineness) opened negative at Rs
39,465 per kilogram from last Friday’s closing level of Rs 39,765 and later drifted to 39,135 before finishing at Rs 39,270, showing a loss of Rs 495 per kilo, or 1.24 per cent.
Rupee crumbles to fresh 2-week low
The Indian rupee suffered an intense plunge and closed at a near two-week low of 64.06 against the US dollar after the government announced long-term capital gains (LTCG) tax on equities and widened its fiscal deficit target while unveiling the Union Budget.
Forex market sentiment turned highly volatile and reacted vehemently to some key budget announcements triggering panic dollar buying by corporates and importers.
The home currency settled the week with a sharp 51
paise, or 0.80 per cent.
Unveiling the budget, Jaitley projected a higher fiscal deficit of 3.5 per cent of the GDP for 2017-18, as against the target of 3.2 per cent.
Besides, the Centre introduced long-term capital gains tax of 10 per cent on stock market gains exceeding Rs 1 lakh and the net borrowing for the current fiscal was also steeply raised to Rs 4.79 lakh crore as against the Budget estimate of Rs 3.5 lakh crore.
It was a double-whammy for the Indian currency following the FOMC announcement hit hard by hawkish Federal Reserve policy and a sudden rise in global crude prices, adding to worries about rates rising too quickly.
The FOMC held interest rates unchanged in line with market expectations but the accompanying statement was a bit more hawkish on the economy and inflation warranting further rate hikes in 2018.
The volatile situation was further aggravated by heavy losses in the domestic equity markets which witnesssed carnage following post-Budget sell-offs amid global crash.
Both the benchmark indices pulled back nearly 3 per cent in the bloodbath.
The rupee started the week on a subdued note at 63.60 against last Thursday’s close of 63.55 at the Interbank Foreign Exchange (forex) market due to month-end dollar demand amid firm greenback overseas.
It traded in a tight range early part of the week before taking a knock reacting to post announcements of budgetary proposals.
The home currency plunged to a fresh one-month low of 64.20 on Thursday before ending at 64.06, showing a loss of 51 paise, or 0.80 per cent.
The RBI, meanwhile fixed the reference rate for the dollar at 64.0781 and for the euro at 80.0335.
In the meantime, the country’s foreign exchange reserves rose sharply by USD 3 billion to touch a new life-time high of USD 417.789 billion in the week to January 26, the RBI said.
Foreign funds and overseas investors continued their portfolio buying spree and infused USD 248.05 million during the week.
In the international commodity front, global crude prices came under renewed selling pressure against the backdrop of rising oil production in the US, together with firming greenback following a strong US jobs report.
US shale production is soaring as the oil rig count once again ticked up this week, but OPEC’s high compliance and the continued crisis in Venezuela has left oil markets at a standstill.
Brent crude futures settled at USD 68.58 a barrel.
On the global front, the American currency rose Friday against a number of currencies including the Japanese yen and the euro after the monthly jobs report surpassed expectations.
US job growth surged in January and wages increased further, recording their largest annual gain in more than 8-1/2 years.
The dollar index, which measures the greenback’s value against a basket of six major currencies, was up at 88.69 in early trade.
In cross-currency trade, the rupee remained under intense pressure against the Euro and British Pound for the fourth-straight week.
The Indian unit plummeted sharply by a staggering 1.15 against the euro to end at 80.02 from 78.87 and tumbled against the pound sterling to finish at 91.12 per pound from 90.63 last weekend, respectively.
The local unit, however rebounded against the Japanese Yen to close at 58.30 per 100 yens from 58.32.
In the forward market, premium for dollar drifted further due to persistent receiving from exporters.
The benchmark six-month forward dollar premium payable for June edged down to 119-121 paise from 118-120 paise, while the far-forward contract maturing in December 2018 held steady at 256-258 paise last Friday. (PTI)
