BackGlobal stocks keep Indian indices under pressure
Closure of six Franklin Templeton debt fund schemes worsened investor sentimentsIndian markets expected to remain volatile considering the rising number of cases in the country.
PremiumIndian stock markets remained under selling pressure on Friday as weakness in global peers dragged indices, with the closure of six Franklin Templeton debt fund schemes worsening sentiment. The BSE Sensex ended at 31,327.22, down 535.86 points or 1.68%, while the 50-share Nifty was at 9,154.40, down 159.50 points or 1.71%.
Markets in Japan, China, Hong Kong, and Korea were down by more than 1% on media reports raising doubts over a probable covid-19 treatment.
Indian benchmark indices were down in sync with global markets and tracking increasingly weak economic data from countries around the world, especially the US, analysts said. Uncertainty over the effectiveness of a vaccine that was in development also contributed to the overall negativity.
Markets are expected to remain volatile considering the rising number of cases in India and lack of positive signals from earnings guidances.
Global sentiments were weak following reports that remdesivir, a Gilead Sciences drug, disappointed in its first randomized clinical trial and the US weekly jobless claims rose for third straight week, said Siddhartha Khemka, head, retail research, Motilal Oswal Financial Services Ltd.
Further, the mounting economic pressure of the lockdown to tackle the pandemic with no respite in sight added to the woes.
“On the domestic front, Franklin Templeton Mutual Fund announced winding up of six debt schemes because of redemption pressure and lack of liquidity in bond markets amid the covid-19 crisis, which added to the selling pressure. Even media reports that the meeting between the Prime Minister and finance minister has got postponed and is likely to happen next week, dampened the sentiments," Khemka said.
Others concur. “The Nifty was down 1% for the week, though the trend of higher highs and lows continues to be maintained for a third week in succession. The rupee has been largely stable with foreign institutional investor flows neutral, adjusted for stock futures flows. A stable foreign flow environment, combined with news flow on fiscal stimulus can act as the base for Nifty to break through resistance in the 9,300-9,400 range, which also represents a 38.2% retracement level for the index," said S. Hariharan, head, sales trading, Emkay Global Financial Services.
The rupee has been largely firm on Friday. The Indian currency ended at 76.46, down 0.50% from the previous close. The 10-year bond-yield closed at 6.17 up 12 basis points.
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