Indian markets close weak after a volatile trade

Indian markets close weak after a volatile trade

Mumbai: Indian stocks extended losses on Friday as investors turned cautious ahead of key economic data from the US. After opening with gains, the benchmark indices steadily lost ground as lack of positive cues from the domestic market heldback investors from taking fresh positions.

A slow pace of expansion in India’s services industry added to investor pessimism. According to the latest PMI numbers, India’s services expanded at the slowest pace in 20 months. The HSBC Markit Business Activity Index fell to 55.0 in May from 59.2 in April. Read more... Also weighing on the investors’ mind is the ensuing release of US employment numbers. Stock markets in Asia and Europe dropped on expectations that US unemployment might rise.

Sensex: 18,376 –0.64%

Nifty: 5,516 –0.61%

Nikkei: 9,492 –0.66%

FTSE 100: 2,782 –0.01%

HDFC, Axis Bank, SAIL and Reliance Industries led the losses in the Nifty. HDFC lost more than 3% after the National Housing Bank increased standard assets provisioning on retail home loans from 0.1% to 0.4%. The move is likely to impact earnings of housing finance companies as they need to set aside more money.

HDFC: 659 –3.07%

Axis Bank: 1,243 –2.41%

SAIL: 146 –2.28%

Index heavyweight Reliance Industries lost more than 1.5% as lack of any major announcement by its chairman at the company’s AGM disappointed investors. Investors were expecting Mukesh Ambani to throw some light on depleting gas production at KG gas basin and future plans.

Reliance Industries: 936 –1.58%

Meanwhile, Anil Ambani group stocks witnessed a sharp rebound on the bourses. Stocks gained after a trial court on Thursday shot down the plea to probe ADA group chairman Anil Ambani.

Reliance Communications: 94 +4.50%

Reliance Capital: 523 +2.51%

Reliance Power: 118 +1.93%

Reliance Infrastructure: 558 +1.17%

On the sectoral front, oil & gas, metal and healthcare stocks led the losses on the BSE. Capital goods and consumer durables are the only two indices that closed with gains.

BSE Oil & Gas: 9,467 –1.34%

BSE Metal: 15,082 –1.05%

BSE Healthcare: 6,307 –0.94%

Except Cairn India all stocks in the BSE Oil & Gas index closed the day with losses. Broking firm UBS raised the price target for Cairn India to 425 rupees citing potential upside from further reserve accretion and longer peak production. Stocks of oil marketing companies slumped by more than 1% each.

Cairn India: 334 +0.35%

Indian Oil Corporation: 324 –2.25%

HPCL: 377 –2.02%

Gail India: 439 –1.70%

BPCL: 622 –1.03%

Overall, 50.65% of the stocks traded on the BSE closed the day with losses.