MUMBAI, June 3 (PTI): Equity indices swooned in the last hour of trade on Friday to close with modest losses as risk-on sentiment remained subdued ahead of the RBI’s policy decision next week.
A weak rupee and unabated selling by foreign funds further weighed on bourses, traders said.
After soaring over 600 points in intra-day trade, the 30-share BSE Sensex came under sudden selling pressure towards the fag-end to close 48.88 points or 0.09 per cent lower at 55,769.23.
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Similarly, the broader NSE Nifty dipped 43.70 points or 0.26 per cent to finish at 16,584.30.
UltraTech Cement was the biggest loser in the Sensex pack, shedding 5.49 per cent, followed by Maruti, NTPC, Axis Bank, Bajaj Finserv, IndusInd Bank and M&M.
On the other hand, index heavyweight Reliance Industries topped the winners’ chart for the second straight day, climbing 2.02 per cent.
Infosys, Larsen & Toubro, Sun Pharma, TCS, Wipro and HUL were among the other prominent gainers.
“The late sell-off indicates the lack of confidence in the domestic market driven by the concerns over central bank policy. While in the global market, the investors were waiting for the release of US job data.
“The RBI is expected to hike rates by 25 bps to 35 bps and the Fed by 50 bps, but the outlook and changes in the economic growth and inflation will determine the market trend. If the central banks decide on a stringent policy tightening, the market mood can swing bearish,” said Vinod Nair, head of Research at Geojit Financial Services.
On a weekly basis, the Sensex advanced 884.57 points or 1.61 per cent, while the Nifty gained 231.85 points or 1.41 per cent.
“The local markets are waiting for the outcome of the RBI monetary policy, mid-week next week, and also the FOMC meeting by mid-June. The likelihood of rate action as well as liquidity reduction measures, it is feared, might adversely affect economic growth which is already slowing down owing to high inflation and its consequences for consumption spending.
“The condition is further accentuated by the fact that oil prices are trading relatively higher and the prospects of the same moving lower in the near future looks bleak. These factors will continue to occupy the mind of the market as we progress further into the month,” said Joseph Thomas, head of Research, Emkay Wealth Management.
In the broader market, the BSE midcap gauge declined 1.45 per cent on Friday and the smallcap index lost 1.16 per cent.
Among BSE sectoral indices, power index tanked 2.40 per cent, followed by basic materials (2.31 per cent), utilities (2.21 per cent) and auto (1.74 per cent). Energy, IT and tech ended with marginal gains.
World markets were largely steady ahead of the release of jobs data in the US which would provide clues on the health of the economy and Federal Reserve’s policy tightening roadmap.
Elsewhere in Asia, buses in Seoul and Tokyo ended in the green. Chinese markets were closed for a holiday.
Markets in Europe were trading mostly higher during afternoon trade. Wall Street had ended sharply higher on Thursday.
Meanwhile, international oil benchmark Brent crude declined 0.66 per cent to USD 116.8 per barrel.
The rupee pared initial gains and settled 3 paise lower at 77.63 (provisional) against the US dollar.
Foreign institutional investors offloaded shares worth a net Rs 451.82 crore on Thursday, according to stock exchange data.
