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Nachiket Kelkar
Nachiket Kelkar

STOCK

Market watch: Mixed trends, auto stocks among major losers

Bombay Stock Exchange (File) Bombay Stock Exchange | Agencies

Benchmark equity indices were under pressure on Friday, with both Bombay Stock Exchange's Sensex and the NSE Nifty closing about 0.5 per cent lower, as investors remained cautious after the markets hit fresh high earlier this week, and uncertainty prevailed as we head towards the launch of the Goods and Services Tax from July 1. Some profit booking ahead of the long weekend was also seen.

The Sensex was down near 153 points or 0.5 per cent to close at 31,138.21 points and the wider Nifty50 index declined 0.6 per cent or 55 points to 9,574.95 level.

For the week, trends were mixed; Sensex rose 0.3 per cent, but the Nifty 50 fell 0.1 per cent.

The Sensex hit a lifetime high of 31,522.87 on Thursday.

“There was selling pressure as we head into a long weekend...There is also the F&O (futures and options contracts) expiry in the short week ahead, so investors didn't want to take fresh positions now,” said Sageraj Bariya, vice president at East India Securities.

The weak trend was also visible in markets overseas. While, Hong Kong Hang Seng and Singapore's Straits Times ended slightly lower, Japan's Nikkei and Korea's Kospi saw little gains. European markets also traded mixed.

Back home on Friday, auto stocks were among the major losers; while Hero MotoCorp and Tata Motors skidded around 2 per cent, Mahindra & Mahindra fell 1.5 per cent and Maruti Suzuki and Bajaj Auto were down close to 1 per cent.

Automobile wholesales are likely to be impacted in June as dealers are not stocking up in the wake of the GST rollout from July 1. Many car makers have in fact offered huge discounts and promotions to attract customers ahead of the GST rollout.

Some banking stocks were also under pressure on Friday with State Bank of India down about 2 per cent and HDFC Bank, Kotak Mahindra Bank declining around 1.1 per cent. ICICI Bank, however, bucked the trend and ended 0.7 per cent higher.

Elsewhere, Electrosteel Steels tumbled 6 per cent after a consortium of lenders agreed to refer the company to the National Company Law Tribunal under the insolvency and bankruptcy code.

Bhushan Steel, which has also been refered to the NCLT, also slumped close to 10 per cent, although it recovered to close in the green.

The Reserve Bank of India on Thursday expanded the oversight committee that was formed to advice banks on the resolution of bad loans by adding three more members to the existing two. YM Deosthalee, the chairman of L&T Finance Holdings, MBN Rao, former chairman of state-run Canara Bank and S Raman, wholetime member at Securities and Exchange Board of India are the new members.

“While the recent steps taken to reduce the NPA problems of banks is largely positive, addressing the issues is going to take a long time and banks may also have to take a hair cut in some of the cases, so there is some concern,” said an analyst at a domestic brokerage.

Meanwhile, in another major development, the joint lenders forum led by State Bank of India and ICICI Bank approved the Rs 86,000 crore sale of Essar Oil to Rosneft. This will be the largest foreign direct investment into India. On Thursday, Igor Sechin, CEO of the Russia's largest oil producers had told shareholders that the deal could now be considered closed.

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