Benchmark equity indices witnessed first weekly decline in three weeks as the Street was grappled with caution ahead of corporate India's result season, and weak economic data triggered profit booking in sectors related to manufacturing and infrastructure. IT major Infosys will announce results on January 10.
Falling for the third consecutive session, Sensex ended 0.18% (37 points) lower at 20,851.33 on Friday. The Nifty ended 0.16% (10 points) lower at 6,211.15. Broader markets, however, bucked the trend seen in frontline stocks. The BSE Mid-cap and Small-cap indices gained more than 0.6% on Friday. For the week, Sensex and Nifty lost more than 1.6% as foreign institutional buying slowed down, while selling by domestic institutional investors (DIIs) surged to three-week high as concerns over macro-economic situation resurfaced. Moreover, the fall in benchmark indices was the biggest weekly fall in two months.
Provisional data from stock exchanges showed FIIs sold Indian shares for the first time in 11 sessions. For the week, foreign funds bought $180.8 million of equities in the cash segment — lowest weekly tally since the week ending October 4, 2013. On other hand, DIIs sold shares worth R1,178.91 crore, highest since week ended December 13 data showed.
On Thursday, according to an HSBC survey, India's manufacturing Purchasing Managers' Index (PMI) — measure of output — declined to 50.7 in December, compared with 51.3 in November. On Friday, China's official (PMI) for the non-manufacturing sector dipped to 54.6 in December from 56.0 the previous month.
“Car sales continue to remain weak, manufacturing is still in doldrums, and fiscal deficit is ballooning. Economic policies are worrying the market,” said an institutional dealer of a US-based financial services firm, requesting not to be quoted.
Banks and shares of rate sensitive sectors such as real estate, mining and metals, power, capital goods ended in the red. BSE Capital Goods index declined 4.7% during the week, followed by BSE Power (-3.3%), Bank Nifty (-2.5%), and BSE Auto (-2.3%). BSE Healthcare and CNX IT indices ended positive on a week-on-week basis.
The mood in global markets was mixed, with major European indices trading week while US equities flat-to-positive. Asian markets also showed mixed performance in a holiday-shortened week. For the week, Dow Jones has gained 0.4%, whereas S&P 500 was flat. Other major Asian (ex Japan) and European indices were flat to negative.
Back home, market breadth was weak with 22 out of 30 Sensex companies ending in the red.