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NBFC default concerns, US Fed rate hike subdue equity indices
Ongoing concerns in the non-banking financial sector led by the IL and FS crisis, along with a interest rate hike by the US Federal Reserve, subdued the key Indian equity indices on weekly basis during September 24-28 period.
The domestic market fell for the fourth consecutive week, also due to a weak rupee and high crude oil prices, analysts said.
On a weekly basis, the Sensex closed at 36,227.14 points, lower 614.46 points or 1.67 per cent from its previous close.
Similarly, the wider Nifty50 of the National Stock Exchange on Friday closed at 10,930.45 points, down 212.65 points or 1.91 per cent from the previous week's close.
The IL&FS default issue took centre stage during the week and weighed on the banking and financial stocks.
"The series of events started with the default of repayment obligations by the entity (IL&FS) to some mutual funds and financial institutions... It has become a liquidity challenge for the system as a whole and Non-Bank Finance Companies (NBFCs) in particular," said Shibani Kurian, Head of Equity Research at Kotak Mutual Fund.
According to Hem Securities' Director Prateek Jain, liquidity is still a problem in the market and interest rate hike by the US Federal Reserve also subdued the sentiments in the domestic market.
In terms of investments, provisional figures from the stock exchanges showed that foreign institutional investors sold scrips worth Rs 3,713.09 crore, while the domestic institutional investors bought Rs 8,437.32 crore worth of stocks during the week.
According to National Securities Depository (NSDL) figures, foreign portfolio investors (FPIs) divested Rs 511.65 crore, or $68.82 million, in the equities segment during the week ended September 28.
On the currency front, the Indian rupee closed at 72.48 a US dollar on Friday, 28 paise weaker from the previous week's close of 72.20.
Sector-wise, none of the sectors rose on a weekly basis, while the major losers were the realty, infrastructure, power, banking, IT and telecom indices, said Deepak Jasani, Head of Retail Research at HDFC Securities.
The top weekly Sensex gainers were Tata Consultancy Services (up 3.84 per cent at Rs 2,184.50); Reliance Industries (up 3.40 per cent at Rs 1,258.20); Infosys (up 3.05 per cent at Rs 727.85); Axis Bank (up 2.16 per cent at Rs 612.35); and HDFC Bank (up 1.87 per cent at Rs 2,005.65 per share).
The major losers were Yes Bank (down 19.20 per cent at Rs 183.45); Tata Motors (DVR) (down 11.64 per cent at Rs 116.50); Tata Motors (down 10.69 per cent at Rs 223.45; Mahindra & Mahindra (down 10.08 per cent at Rs 860.70); and Adani Ports (down 9.27 per cent at Rs 328.45 per share).