Indian benchmark indices ended marginally down on Friday as economic growth concerns, below-par third quarter earnings and twin deficit problems built a cautious mood among investors ahead of the Union Budget. Shares of IT, energy and healthcare companies contributed to the fall.
While the market recovered sharp losses witnessed earlier in the trade, benchmark indices touched their new 2013 lows. Moreover, broader markets witnessed huge selling pressure as issues related to corporate governance cropped-up.
For the first time in CY13, Indian equities posted negative returns for a brief period of time on Friday as the Sensex dropped to 19,381.15. It, however recovered to end at 19,468.15, down 29.03 points, or 0.15%, from Thursday's close. Market breadth was weak too. On the BSE, 896 stocks advanced on Friday against 1,234 that ended in the red.
The broader Nifty ended 9.55 points, or 0.16%, lower to close at 5,887.40. On a weekly basis, Indian equities posted their third consecutive weekly decline, led by a sharp fall in real estate and capital goods stocks.
Dr Reddy's Laboratories was the biggest loser on Friday. The scrip declined 3.55% after BofA-ML downgraded the stock to ‘neutral’ from ‘buy’ as Q3 earnings late Thursday fell below market expectations.
Other frontline stocks that ended in the red included Bajaj Auto, Tata Steel, Reliance Industries and Infosys — all falling over 1%. Extending last week's fall, BSE Realty index was the biggest loser this week. After falling 2% in the previous week, it dropped another 5%. Shares of capital goods and power utility companies also extended last week's fall.
DLF lost 7.5% this week, while Unitech and DB Realty declined over 14% each following reports of alleged collusion of company and their respective promoters with a CBI official in the 2G spectrum case. While the BSE Capital Goods index declined 4% this week, BSE Power Index dropped almost 3%. “The market was lacking depth. The mood was extremely cautious and will remain so until the Budget. Corporate governance issues and weak earnings dampened the mood for the last few days,” said independent analyst Ambareesh Baliga.
In Asia, Japan's Nikkei 225 ended down 1.6% on a weekly basis, while Chinese Hang Seng and South Korean Kospi gained 1.3% and 2.5%, respectively. Europe was also trading mixed with UK's FTSE 100 index and French CAC 40 trading marginally up, but German DAX trading down 0.5%.