Q3 results dampen investors' sentiments; equity indices slide over 1%

Disappointing quarterly results, combined with foreign fund outflows and negative global cues, pulled the Indian equity market lower during the week ended on Friday. Index-wise, the volatile week saw the S&P BSE Sensex decline by one per cent, while the NSE Nifty50 edged-lower by 1.16 per cent.

"Domestic markets witnessed volatile trade tracking lacklustre global cues as political uncertainty in the US and worries about weakening global economic growth weighed on investor sentiment," SMC Investments & Advisors CMD D.K. Aggarwal told IANS.

"Even some strength in the rupee failed to give much fillip to market. The December quarter earnings have been a mixed bag so far."

According to Geojit Financial Services` Head of Research Vinod Nair: "Mid and small caps continued to underperform as mixed quarter earnings dragged investor`s focus from riskier portfolios."

"Additionally, apprehension over governments` ability to meet the fiscal target of 3.3 per cent of GDP in FY19 due to lower tax revenue and higher fiscal expenditure, also dragged the sentiment."

Consequently, the BSE Sensex declined 1 per cent or 361.07 points to close at 36,025.54 points. The NSE Nifty50 closed at 10,780.55 points, down 1.16 per cent or 126.4 points lower on a week-on-week basis.

On a stock-specific basis, ITC and Maruti Suzuki stocks faced sell-offs due to lower than expected quarterly results, whereas Sun Pharma and Yes Bank shares gained.

"The week was full of surprises with rumours doing rounds about Zee Group involved in money laundering activity during demonetisation," said Rahul Sharma, Senior Research Analyst with Equity99.

"Apart from this, lower than expected corporate earnings by heavyweights like Maruti, Ultratech cement dragged the Sensex and Nifty...."

Globally, international stock markets were cautious amid further signs that the global economic growth might weaken.

During the week, the International Monetary Fund (IMF) slashed its world economic forecast, warning that the expansion seen in recent years is losing momentum.

Besides, the Indian market was dented by an outflow of foreign funds, as FIIs were net sellers to the tune of over Rs 559.31 crore as against domestic institutional investors, who bought over Rs 1,263.03 crore worth of stocks, provisional data on the BSE showed.

On the currency front, the rupee stood standstill at 71.18 against the US dollar at close on Friday compared to last week, after a largely negative trend for most part of the week.

"USD-INR has been juggling in a range on negative cues from domestic markets and crude bounce," said Edelweiss Securities` Head of Forex and Rates Sajal Gupta.

"Though the global backdrop had been positive and dollar index losing shine helped rupee to stay in the range...."

The top gainers on the Sensex were Yes Bank which rose 10.79 per cent during the week, followed by Sun Pharma and Reliance Industries which ended higher by 8.05 per cent and 5.35 per cent during the week ended Friday.

The major losers were auto majors Maruti Suzuki India, Hero MotoCorp and Mahindra and Mahindra, which ended 11.38 per cent, 7.71 per cent and 7 per cent respectively on a week-on-week basis.