Geo-political tensions, macro-data dent investors’ sentiments (Market Review)

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Mumbai, April 15 (IANS) Rising geo-political tensions, along with disappointing macro-economic data points and massive outflow of foreign funds depressed the Indian equity markets during the just-concluded trade week.

Besides, lower revenue guidance from an IT major Infosys stoked concerns over the rest of Q4 (fourth quarter) results’ expectations. However, short covering at lower levels restricted the downside.

The trade week that ended on April 13, 2017 saw the barometer 30-scrip Sensitive Index (Sensex) of the BSE, recede by 245.16 points or 0.82 per cent to 29,461.45 points, while the wider 51-scrip NSE Nifty closed at 9,150.80 points — down 47.50 points or 0.51 per cent.

“Markets corrected this week. Sentiment in global markets remained subdued during the week as investors were cautious amid geo-political tensions in Syria and North Korea,” Deepak Jasani, Head – Retail Research, HDFC Securities, told IANS.

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According to other observers, even the growing uncertainty ahead of France’s presidential election kept market participants in a “wait and watch” mode.

“The global markets remained in the risk aversion mode driven by the geo-political risks emanating mainly from North Korea. This is evident from the rise in safe haven assets such as gold, the yen and US Treasury securities,” Devendra Nevgi, Chief Executive of Zyfin Advisors, told IANS.

Besides, the US President Donald Trump’s call to weaken the US dollar as it was “getting too strong” marred sentiments.

The Indian rupee weakened by 12 paise to 64.41-42 against a US dollar from last week’s close of 64.29.

Apart from geo-political tensions, investors’ risk-taking appetite got eroded by a set of disappointing macro-economic data points which showed that industrial production contracted in February and consumer price inflation edged up in March.

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“India’s industrial output slipped to a four-month low, contracting 1.2 per cent in February, mainly on account of decline in the manufacturing sector and lower off-take of capital as well as consumer goods,” D.K. Aggarwal, Chairman and Managing Director, SMC Investments and Advisors, told IANS.

“On the flip side, India’s Consumer Price Index (CPI), or retail inflation, during March rose month-on-month at 3.81 per cent.”

Market observers pointed out that IT sector dragged the equity markets lower after software major Infosys on Thursday projected a lower revenue growth in 2017-18 than it posted during 2016-17.

“Stock markets have got their first taste of earnings’ disappointment from Infosys. Next week will look forward to more earnings releases,” Nevgi elaborated.

In terms of investments during the week ended April 13, provisional figures from the stock exchanges showed that FIIs sold stocks worth Rs 2,967.75 crore during the week, while domestic institutional investors (DIIs) bought scrip worth Rs 1,794.9 crore.

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Figures from the National Securities Depository (NSDL) revealed that foreign portfolio investors (FPIs) off-loaded equities worth Rs 2,178.58 crore, or $338.09 million, between April 10 and 13.

Sector-wise, the top weekly gainers were realty, infrastructure, pharma and oil and gas indices, whereas the top losers were metals, telecom, capital goods and cement indices.

(Rohit Vaid can be contacted at [email protected])



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