Indian indices closed the volatile week on negative note - ZENMoney

Domestic indices closed the volatile week on a negative note. Expectations of more economic reforms and easing inflation supported the market at lower levels, while depreciation of rupee to a record low level, weak global cues, FII Fund outflows, muted industrial growth weighed on the sentiment. During the week, Sensex and Nifty fell by 251 and 73 points to end at 19178 and 5808 respectively.

Local indices started the week on a positive note amid positive global markets. However sharp fall in rupee faded the hopes of rate cut next week, escalating worries about the current account deficit and fears that foreign investors may pare positions weighed on the sentiment. With the rupee hit a fresh historic low of Rs 58.96 against the dollar, relentless profit booking by investors as well as fund houses kept the indices under pressure.

Although the consumer price inflation slowed for the third straight month in May to 9.31%, lower than expected industrial output (IIP) that rose 2.3% in May and failure to announce any concrete measures by the finance ministry to support the rupee dampened the sentiment further. However, during the last session tracking positive global markets, revival of buying by funds after the Finance Minister signaled more reforms to boost economic growth and further slowdown in inflation for the month of May to 4.7%, the markets witnessed rally in interest rate sensitive stocks on expectations of rate cut ahead of RBI meet on Monday.

FIIs on the back of gloomy global market sentiment and rupee's depreciation against the dollar they turned net sellers. During the previous five sessions, they net sold equities to the tune of Rs 1576 Cr. Mutual funds too continued to trim their positions, they net sold equities worth Rs 267 Cr.

Oil & gas is the only sector that closed on a positive note as stocks witnessed buying on news of increase in petrol prices by Rs 1.5-2/litre with effect from Friday midnight. Capital Goods space outperformed the benchmark indices. While consumer durables, metal and realty stocks witnessed selling pressure and stood as top losers. Selective metal stocks witnessed selling on coal scam woes.

As on Friday, the advance to decline ratio stood at 13:5 depicting the buying interest ahead of the RBI meet next week.

Source : Equity Bulls

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