The market fell sharply for the fifth consecutive session Friday, with the Sensex shedding more than 300 points and taking the total weekly loss to more than 1,100 points on geopolitical tensions and disappointing earnings.
The 30-share BSE Sensex plunged 317.74 points or 1.01 percent to 31,213.59 and the 50-share NSE Nifty fell 109.45 points or 1.11 percent to 9,710.80.
However, the broader markets outperformed benchmarks after losing more than 5 percent in last few sessions. The BSE Midcap index was down 0.2 percent and the Smallcap ended flat as market breadth improved in afternoon.
Advance:decline ratio remained in favour of declines at 1:2 but was better than 1:8 in morning.
Analysts expect more downside to the market, though there could be minor pullback. They expect the Nifty at around 9,500 level soon due to global factors.
“The overall negative chart pattern with other negative technical aspects of larger and smaller timeframe is now opening up the downside target for Nifty by around 9000 levels, which could be achieved in the next couple of months,” Nagaraj Shetti of HDFC securities said.
According to him, there is a possibility of minor pullback rally attempt by next week (maximum up to 9820-9850 levels), but eventually this support is likely to be broken on the downside.
Ashwani Gujral of ashwanigujral.com expects the fall to continue for next 3-4 weeks and the Nifty can test 9,400 level. The recovery, if it happens during this period, won’t be sustainable, according to him.
However, he believes, the market may start rallying in the middle of September.
For the week, the Sensex plunged down 3.4 percent or 1112 points and the Nifty shed 356 points or 3.5 percent.
European markets – France’s CAC and Britain’s FTSE were down 1.1 percent each (at the time of writing this article) as geopolitical tensions over North Korea intensified, especially after US President Donald Trump issued a new round of comments against North Korea. Asian markets also ended sharply lower as China’s Shanghai Composite, Hong Kong’s Hang Seng, Australia’s ASX 200 and South Korea’s Kospi dropped 1-2 percent.
Back home, barring Pharma, all sectoral indices ended in red. PSU Bank index hit hardest, down nearly 5 percent after disappointing earnings SBI, Oriental Bank of Commerce and Union Bank.
State Bank of India crashed 5.4 percent after slippages surged to 30,059 crore in Q1 and asset quality weakened further, though profit and net interest income numbers were ahead of analysts’ estimates.
Bank of Baroda (down 4 percent) and Sun Pharma (down 1.92 percent) also posted weak set of earnings after market hours.
The Nifty Metal index lost 3.4 percent after aluminium major Hindalco’s profit fell 1.6 percent due to one-time loss of Rs 104.4 crore, and on fall in global metals stocks.
Reliance Industries, L&T, M&M, Maruti Suzuki, Tata Motors, HUL and ONGC were down up to 3 percent whereas Dr Reddy’s Labs and Aurobindo Pharma, the most beaten down stocks saw a 3 percent rally and Lupin also gained 0.77 percent.
Infosys and Wipro continued to gain, up over half a percent after further depreciation in rupee to 64.13 against the US dollar (from 64.09 on Thursday).
Cochin Shipyard, the largest public sector shipyard company, outperformed in a bad market as the stock closed at day’s high of Rs 528.15, up 22.26 percent over its issue price of Rs 432.
Among midcaps, CG Power, Chambal Fertiliser, GSFC, Mastek, Marksans Pharma, Natco Pharam, Sun V Network, Tata Global (post good earnings), Bajaj Finance and M&M Financial rallied up to 10 percent.
However, Indo Count, TVS Motor Company, OBC, PFC and Union Bank fell sharply post bad earnings.