Shagun Roy, Pune
Indian stocks closed in the red on Friday, marking a fifth consecutive week of losses. This decline was driven by various sectors facing losses following the Reserve Bank of India’s (RBI) policy meeting minutes, highlighting concerns about near-term inflation risks.
Investors eagerly anticipate a speech by US Federal Reserve Chair Jerome Powell later. The Nifty 50 index saw a 0.62% drop to 19,265.80, while the S&P BSE Sensex experienced a 0.56% decrease, closing at 64,886.51. Over the week, the Nifty and Sensex slipped by 0.23% and 0.10%, respectively. Interestingly, a similar five-week downturn was observed in April-May 2022.
Chris Wood, the global head of equity strategy at Jefferies, noted in his weekly newsletter that India’s stock market is likely to experience a consolidation phase. He described this as a slight relief following the recent market performance.
All 13 major sectoral indexes faced declines, with financial services and IT seeing losses of 0.34% and 0.64%, respectively. Reliance Industries, an oil-to-telecom conglomerate, saw a 0.46% drop on Friday. Its losses extended over the week to 3.46%, marking its worst performance in more than five months.
The decline in domestic equities on Friday followed the RBI’s policy meeting minutes, which expressed concerns about inflation due to recent increases in food prices and a surplus of liquidity in the banking system. Investors are now focusing on Federal Reserve Chair Powell’s speech at a global central bankers’ annual gathering. They hope to gain insights into the US central bank’s potential interest rate changes. Concurrently, Asian markets also saw minor decreases.
Anand Rathi analysts suggested that even if the market corrects itself in the short term, equity returns in the upcoming year will likely remain favourable. Moody’s Investor Service maintained a positive outlook, highlighting that factors such as decreased raw material costs, consistent demand, and continued government spending on infrastructure would support Indian companies’ earnings.
On an individual stock level, Bajaj Finance and Bajaj Finserv saw gains of 1.04% and 2.40%, respectively. This followed a positive endorsement from global brokerage Nomura.