Weekly market wrap: Sensex slips over 3% for second straight week ahead of Budget

Indian equity market lost three per cent for the second straight week in tandem with global selloff after the US Federal Reserve signalled policy tightening from March. The benchmark BSE Sensex tumbled 1,836.95 points, or 3.11 per cent, to 57,200 on January 28 against 59037.18 on January 21. Likewise, the 50-share NSE Nifty index retreated 515.20 points, or nearly 3 per cent, to 17,101.95 during the same period.

Market watchers added that depreciating rupee and outflows by foreign institutional investors further weighed on sentiment. As many as 36 companies in the Nifty index settled the week in the red. With a fall of 11.48 per cent, Tech Mahindra emerged as the top loser in the index. It was followed by Wipro (down 8.74 per cent), Titan Company (down 8.41 per cent), HCL Technologies (down 7.49 per cent) and Tata Steel (down 7.27 per cent).

Dr Reddy’s Labs, Reliance Industries, Divi’s Labs, Infosys, Grasim and Asian Paints also declined over 5 per cent. On the other hand, Cipla, Axis Bank, IndusInd Bank, NTPC, Maruti Suzuki and State Bank of India gained between 4 per cent and 8 per cent.

Commenting on the sell-off on D-Street, Rahul Shah, co-head of research, Equitymaster said, “A combination of global factors like Fed’s hawkish stance and hardening crude prices coupled with domestic headwinds of budget-related anxiety and stretched valuations are making life difficult for bulls. Investors would be advised to steer clear of fundamentally weak stocks and also the ones where valuations are ruling at multi-year highs.”

Among the sectoral indices on BSE, the Consumer Durables index declined the most 6.83 per cent. Information Technology, Realty, Teck, Metal and Capital Goods indices also slipped between 2 per cent and 6 per cent.

Foreign Institutional Investors stood net sellers in the equity segment with gross purchases of Rs 33,253.64 crore and gross sales of Rs 52,705.26 crore, leading to a net outflow of over Rs 19,000 crore.

Vinod Nair, head of research, Geojit Financial Services said, “This highly volatile week, the domestic market followed global reactions of Fed policy meeting, Russia-Ukraine tension and rising oil prices amid pre-budget jitters.”

The forthcoming week will have the mega event of Union Budget which will keep the markets buzzing through the week and there will be sector-specific moves based on the budget announcements, with lots of hopes hinging with the Finance Minister.

“The domestic trend will be muted in the short-term considering the Union Budget and state elections outcome,” Nair added.

The week will also mark the start of the new month and lots of economic data will be released along with the auto sales numbers which will show the real state of the auto sector. Core Sector data will also be announced for December.

Other economic data including Markit Manufacturing PMI will be released on February 1. IHS Markit India Manufacturing PMI was down to 55.5 in December 2021 from a tenth-month high of 57.6 in October. Markit Services PMI for January will be released on February 3. IHS Markit India Services PMI fell to 55.5 in December of 2021 from 58.1 in November.

In the ongoing result season, few majors that are slated to announce their December quarter earnings including Gravita India, Indusind Bank, MCX, NTPC, BPCL, Exide Industries, IOC, Sun Pharma, Tata Motors, Adani Ports, Bajaj Consumer Care, Dabur India, HDFC, Adani Power, Cadila Healthcare, Gail, Lupin, Cholamandalam Investment and Finance, Tech Mahindra, Adani Green Energy, Apollo Tyres, Radico Khaitan, Titan Company, Birla Corporation, Indigo etc among others.
 

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