Mumbai: Indian shares fell 1 per cent on Friday - last session of the August month - due to slowdown in the growth momentum, political & policy paralysis and unlikely of QE3 hint by Ben Bernanke in the Jackson Hole meet today evening. Unwinding of long positions as the market head into September month too added fuel to the fire in the second half of trade.
Even the less room for rate cut (after today's GDP) by the Reserve Bank of India in the upcoming monetary policy, which is scheduled for September 17, too was spoilsport for the market. The 50-share NSE Nifty dropped 56.55 points to close at 5,258.50 after showing a recovery from four-week low.
Nischal Maheshwari of Edelweiss Financial Services feels the RBI has very limited elbow room to do anything. "We do not expect any rate cuts as far as September is concerned."
Meanwhile the 30-share BSE Sensex lost 160.89 points to 17,380.75, weighed down by FMCG, technology, metals, infrastructure and banks stocks.
According to the statistical report, the gross domestic product grew 5.5 per cent in the first quarter of FY13 as against 5.3 per cent in previous quarter, which was slightly ahead of analysts' expectations of 5.3 per cent. Growth in agriculture, manufacturing, industrial and services sector was less in the quarter as compared to corresponding quarter of last fiscal. Private final consumption grew at 3.9 per cent as against 4.8 per cent during the same period, which also dampened mood.
Given the inflationary pressures, unsatisfactory monsoon and the policy stasis, Arun Singh, senior economist of Dun & Bradstreet India expects growth to remain subdued during the second quarter of FY13 with GDP growing below 6 per cent. "We have revised downwards our GDP growth forecast from 6.7 per cent to 6.2 per cent for FY13," he said.
On the global front, France's CAC, Germany's DAX and Britain's FTSE gained 0.5 per cent each ahead of central bankers' meet at Jackson Hole today evening. However, experts do not expect any hint of QE3 by Federal Reserve chairman Ben Bernanke.
Patrick Legland of Societe Generale, says that I don't think that we will have QE3 at this stage because US economy will relatively slide. Certainly, global investors are more focusing on the outcome of European crisis and solution that could be found.
Back home, index heavyweight Reliance Industries and top software services exporter TCS fell 1.3 per cent each. Engineering conglomerate Larsen & Toubro and IT services provider Infosys dropped 0.7 per cent each.
Fast moving consumer goods majors ITC and Hindustan Unilever were down 0.8 per cent and 1.6 per cent, respectively. Country's largest private sector lender ICICI Bank declined 0.9 per cent while its rival State Bank of India was up 0.26 per cent.
State-run power producer NTPC and power equipment manufacturer BHEL went down 2 per cent. Among auto stocks, Tata Motors, Bajaj Auto, Hero Motocorp and M&M were down 1-2 per cent.
Metals stocks were off day's low in late trade; Sterlite Industries and Hindalco Industries, which fell nearly 4 per cent intraday, closed with 2 per cent losses. Coal India tumbled 2 per cent and Tata Steel was down 1 per cent.
Housing finance company HDFC, telecom operator Bharti Airtel and drug producer Cipla gained 1.2-1.6 per cent.
Declining shares outnumbered advancing by 812 to 602 on the National Stock Exchange.
For the week, the BSE Sensex and NSE Nifty tumbled more than 2 per cent, but foreign institutional investors (FIIs) remained buyers this week.
In fact, FIIs have bought more than Rs 10,000 crore worth of shares in August and more than Rs 64,000 crore in the current calendar year 2012. The market gained more than 0.5 per cent in the month gone by and 13 per cent in the year.
Comments
0 comment