Benchmarks BSE Sensex and NSE Nifty today extended losses for the third day and ended at two-week lows dragged down by Mahindra and Mahindra, Tata Power and ICICI Bank shares as caution prevailed over the growing unrest in Iraq choking oil supplies and a weak monsoon stunting economic revival.
The S&P BSE benchmark Sensex slipped another 96.29 points, or 0.38 per cent, to end at 25,105.51 and the NSE 50-share Nifty moved down by 29.25 points, or 0.39 per cent, to finish at 7,511.45, its lowest close since June 5.
Capital outflows also affected the market sentiment. Foreign Portfolio Investors (FPIs) sold shares worth a net Rs 420.51 crore yesterday, as per provisional data.
Shares of public sector oil marketing companies (PSU OMCs) were mostly lower after the main US oil contract, West Texas Intermediate for July, fell 43 cents to USD 106 a barrel while Brent crude for August eased to trade near USD 115 mark.
Besides, tepid monsoon forecast and slowdown in buying by foreign funds, who have been major buyers on the domestic bourses, have dampened sentiments, brokers said.
Automakers like M&M and Hero MotoCorp saw selling on fears that a weak Monsoon will hit vehicle sales.
The southwest monsoon has further advanced into remaining part of Karnataka and Telangana, some parts of Madhya Maharashtra, Vidarbha and east Madhya Pradesh and most parts of Marathawada.
The 30-share index Sensex resumed higher at 25,237.54 and hovered in a range of 25,276.31 and 25,056.18 before ending at 25,105.51, showing a loss of 96.29 points or 0.38 per cent. It has now dropped by 415.68 points or 1.63 per cent in three days. At today's value this is the weakest close for Sensex since 25,019.51 on June 5.
"Markets were lackluster over the week. Sharp rise in crude prices because of Iraq issue dampened sentiments ....Going ahead, we see the monsoon progress and the budget to be the two most important triggers for the markets," said Dipen Shah, Head- Private Client Group Research, Kotak Securities.
Asian stocks ended mixed today as indices in Japan, Singapore and Taiwan moved down by 0.08 per cent to 0.46 per cent while indices in China, Hong Kong and South Korea declined by 0.11 per cent to 0.23 per cent.
European markets were trading higher in their early trade as dovish comments from Federal Reserve Chairwoman Janet Yellen earlier in the week continued to push indices closer to multi-year highs. Key indices in France, Germany and UK moved up by 0.06 per cent to 0.17 per cent.
Turning to the local market, 23 scrips out of 30-share Sensex pack ended lower while 7 counters finished higher.
Major losers were M&M (2.87 per cent), Tata Power (2.74 per cent), Hindalco Industries (2.18 per cent), Sun Pharma (2.01 per cent), Sesa Sterlite (1.08 per cent), SBI (0.98 per cent), ICICI Bank (0.90 per cent) and BHEL (0.77 per cent).
However, Axis Bank moved up by 1.35 per cent, Bajaj Auto 0.70 per cent, Bharti Airtel 0.52 per cent and TCS 0.50 per cent, among others.
Among the S&P BSE sectoral indices that closed lower were Healthcare 0.95 per cent, Auto 0.91 per cent, Capital Goods 0.84 per cent, Power 0.78 per cent and Metal 0.65 per cent. However, Consumer Durable index rose by 3.47 per cent.
For the week, the Sensex fell 122.66 points after it shed 168.29 points in the previous period. The Nifty weakened by 30.65 points for the week ended June 20, after dropping 41.30 points in the week before that.
Mmarket breadth remained negative as 1,671 stocks closed with losses while 1,297 finished with gains. Total turnover dropped further to Rs 3,056.97 crore from Rs 3,883.53 crore yesterday.
Dipen Shah, Head- Private Client Group Research, Kotak Securities: Markets were lackluster over the week. The sharp rise in crude prices because of the Iraqi issue dampened the sentiments. The US Fed continued with its taper program and indicated that, the US economy continues to gain strength. This was a positive. The geo-political issues globally have kept the rupee under pressure over the past few sessions. Going ahead, we see the monsoon progress and the budget to be the two most important triggers for the markets. We feel that, a progressive budget as well as other reform initiatives will likely lead to continued outperformance of Indian indices v/s emerging market peers. However, if there is a continued rise in crude price, it will be a negative from the CAD, rupee and inflation perspective.
Market outlook by Vivek Gupta, Director Research, CapitalVia Global Research Limited: Markets opened on a negative note as Asian shares got off on the back foot on Monday, as crude extended gains and tested nine-month highs on fears the insurgency in Iraq could worsen and affect oil exports. Brent rose about 0.6% to $113.20 per barrel, after touching $114.69 , its highest since September , markets continued to trade weak throughout the weekly session and closed on a negative note at 7530.85.
Overall trend of Nifty June Future is still bullish on chart, The negative closing on charts this week is indicative of some short term correction in Nifty june fut, if Nifty jun fut breaches its major support level of 7510 a steep rally can be expected to the levels of 7445 and 7370. where as on upside important resistance zone to look after is at 7680- 7715 crossing of this zone cal take Nifty to further higher levels of 7835 & 7900 in near term.
Stocks to watch:
ESSAR OIL IN NSE CASH BUY Overall trend of the stock is bullish, it is consolidating below its resistance level of 110.50 from the last few trading session. Also it is trading above its 50 and 200 days moving averages. It is poised to move upside with the crossing of its resistance level, One may initiate the long position in the stock above the resistance level for the target of 116 and 121 with the strict stop loss of 105.
ECLERX IN NSE CASH BUY- Overall trend of the stock is bullish.It is trading in range after a recent corrective movement, also it is sustaining below the trend line and below the resistance level of 1210. It is likely to continue its northward journey with the crossing of its resistance level. Traders can get the target of 1295 and 1365 above the resistance level, for which one should keep stop loss of 1140.