Weekly Review: Sensex sheds 1,630 points, Nifty falls below 7,000

Domestic equity markets posted their biggest weekly fall this week since July 2009 as disappointing corporate earnings, sliding rupee and weak global markets continued to dampen sentiments. Sensex tanked 1,630.85 points, or 6.62 per cent, to 22,986.12 on Feb 12, 2016 from 24,616.97 on Feb 5, 2016. Similarly, NSE Nifty slid 508.15 points, or 6.79 per cent, to 6,980.95 during the week under review.

Barring Bharti Airtel shares, which gained 5.91 per cent in the past five trading sessions, rest all other 29 components of the 30-share index closed in red. Share price of BHEL slid the most (down21.27 per cent), followed by Adani Ports (down 15.39 per cent), Oil & Natural Gas Corporation (down 12 per cent), Tata Motors (down 11.45 per cent) and HDFC (down 8.45 per cent).

Sectorwise, the BSE Realty, BSE Capital Goods index, BSE Metal index and BSE Oil & Gas were hit hard and slid 11.40 per cent, 8.80 per cent, 8.20 per cent and 8.10 per cent, respectively for the week ended Feb 12. Other sectoral indices also ended in red.

Gaurav Jain, director, Hem Securities, said, “Huge carnage in the week gone by was driven by sharp selling pressure across the world equities, global economic growth concerns, disappointing quarterly earnings, continued selling by foreign portfolio investors, crude oil slumping sharply, redemption pressures, margin calls and depreciating rupee against dollar.”

During the week, shares of staffing firm TeamLease Services made a strong debut on bourses on Friday and closed over 20 per cent higher against its issue price of Rs 850.

BofA-ML said in a research note, “While it is most likely impossible to catch the bottom, we believe the ongoing correction provides a good opportunity to add equity in India.”

On the macroeconomic front, India’s Gross Domestic Product (GDP) expanded at a slower clip of 7.3 per cent in Q3 FY16 compared with a growth of 7.7 per cent recorded in the previous Q2FY16. However, numbers were slightly improved from a recorded growth of 6.6 per cent in Q3 FY15. Investors can nonetheless draw solace from a revision in the full year GDP growth estimate for the financial year ending March, 2016 to 7.6 per cent from a previously estimated range of 7.1 – 7.5 per cent.

Foreign portfolio investors offloaded shares worth Rs 2,857.69 crore in the past five trading sessions. Indian rupee slid 1.18 per cent to 68.44 levels on Feb 12 from 67.64 levels on Feb 5.

Asian shares fell for a sixth straight session on Friday as concerns about the health of European banks further threatened a global economy already under strain from falling oil prices and slowdowns in China and other emerging markets.

On the upcoming trading sessions, Dipen Shah, head of private client group research, Kotak Securities, said, “With the quarterly results season nearly over, focus will shift to the budget and we can see sector specific movements over the next few days. However, global factors will continue to have an impact. With the Chinese markets scheduled to open on Monday after a week-long gap, movements in that markets as well as economic data will impact sentiments.”