Equity markets took a breather on Friday, after rallying for the past four sessions. Key indices ended in the red on the back of profit booking in recent gainers and as investors awaited release of key economic data.
The BSE Sensex closed the day at 30,188.15, down near 63 points or 0.2 per cent. The wider NSE Nifty 50 index declined 22 points or 0.2 per cent to close at 9,400.90.
For the week, the Sensex closed up near 1 per cent and the Nifty was up 1.2 per cent.
“The markets are trading at near record highs, so investors have become slightly cautious,” said Sageraj Bariya, vice president at East India Securities.
Both the indices hit fresh record highs this week, with the Sensex touching 30,366.43 and the Nifty also hit a high of 9,451 on Thursday.
The sentiments over the week were boosted by the Meteorological department stating that concerns over the El Nino weather conditions had eased and the country was likely to receive higher monsoon rains than previously forecast.
A good monsoon will not only keep food prices in check, it is also a critical driver of the rural economy, which accounts for a large chunk of revenues in sectors like fast moving consumer goods, consumer durables, two-whelers, farm equipment and agri-chemicals.
In-line or better than expected earnings by several companies have also boosted market sentiments. Among some of the key results announced this week, Godrej Consumer Products reported a three-fold jump in fourth quarter consolidated net profit and HCL Technologies saw its quarterly profit rise over 27 per cent. On Friday, pharmaceutical major Dr Reddy's Laboratories also reported a near-three fold jump in its net profit for the quarter-ended March 31.
With no major global event scheduled over the next week, analysts say corporate earnings will continue to drive the mood in the market.
“Barring IT companies, earnings in many other sectors have been decent so far. If that continues, and if there are no other negative events, markets could hit fresh highs looking ahead,” said Bariya.
Colgate Palmolive, Hindustan Unilever, Tata Steel, Bajaj Auto and State Bank of India are among the key results announcements expected next week.
On Friday, the major Sensex gainers included Infosys and Hero MotoCorp, both gaining over 2 per cent; Cipla, Sun Pharma and Tata Motors were also up about 1 per cent. Among the losers, Asian Paints fell 3 per cent, Axis Bank was down 2.8 per cent and ICICI Bank and Power Grid declined 1 per cent.
On the foreign exchange markets, the Rupee strengthened against the US Dollar to close at 64.31 to a dollar, up 0.1 per cent from its close of 64.38 on Thursday. So far this year, the rupee has appreciated more than 5.5 per cent as foreign institutional investors have continued to pour into India.
Over the last week, FIIs have invested close to Rs 2,000 crore in the equity market, taking their total investments so far in 2017 to Rs 42,315 crore, while another Rs 54,388 crore has been invested in the debt market since January 2017.
