Equity markets turn sluggish on GST caution, global cues

Caution ahead of the launch of the country's biggest indirect tax reform -- the Goods and Services Tax (GST) -- tightened the bear grip over the Indian equity markets, which settled in the negative territory for the third week in a row.

Weak global cues and June derivatives expiry, too, added to the volatility in the equity markets.

On Friday, the 30-scrip Sensitive Index (Sensex) of the BSE closed at 30,921.61 points -- down 216.60 points or 0.70 per cent from its previous week's close. 

The wider Nifty of the National Stock Exchange fell by 54.05 points or 0.56 per cent to close the week's trade at 9,520.90 points.

"Benchmark indices extended their losing streak to the third consecutive week as traders and investors continued to trade cautiously ahead of the GST rollout. Outflows of foreign funds and weak global cues further added to the concerns," Vijay Singhania, Director of Trade Smart Online, told IANS.

Provisional figures from the stock exchanges showed that foreign institutional investors (FIIs) sold stocks worth Rs 1,770.34 crore, while domestic institutional investors (DIIs) purchased scrip worth Rs 1,964.91 crore during June 28-30.

"Overall, volatility ruled the roost throughout the week on account of a historic F&O (futures and options) expiry, which saw the highest turnover ever. Banking stocks remained in focus following reports of Reserve Bank of India (RBI) order seeking hefty provisions for accounts referred to bankruptcy courts," Singhania added.

According to D.K. Aggarwal, Chairman and Managing Director, SMC Investments and Advisors, the global stock market witnessed sell-off during the week as investors grew cautious sparked by a delayed healthcare vote in the US.

"Also, sentiments were badly hit by the speculation that European Central Bank stimulus may be wound down if conditions improve. Back at home, market also witnessed volatile movements tracking global cues ahead of June derivatives expiry," said Aggarwal.

Commenting on stock-specific movement, Sanjeev Zarbade, Vice President - PCG Research, Kotak Securities, said: "The RBI has increased the provisioning on accounts referred for bankruptcy, which led to weakness in bank stocks. Metals sector ended in the positive zone, which was attributed to rebound in global metal prices."

"Oil and gas stocks fell tracking the global crude prices," Zarbade added.

During the week, the Indian rupee weakened by five paise to 64.58 as against the US dollar from it's last week's close at 64.53 to a greenback.

Figures from the National Securities Depository (NSDl) revealed that foreign portfolio investors (FPIs) invested in a total of equities worth Rs 334.47 crore, or $51.9 million, during June 27-30.

The top weekly Sensex gainers were: Tata Steel (up 7.28 per cent at Rs 544.35), ITC (up 4.18 per cent at Rs 323.85), Bharti Airtel (up 3.62 per cent at Rs 379.15), Power Grid (up 2.56 per cent at Rs 210.55) and Cipla (up 2.50 per cent at Rs 554.35).

The losers were: State Bank of India (down 5.28 per cent at Rs 273.60), Tata Motors (down 4.55 per cent at Rs 263.30), Asian Paints (down 4.32 per cent at Rs 1,104.15), Reliance Industries (down 3.82 per cent at Rs 1,380.25), and Kotak Bank (down 3.04 per cent at Rs 955.45).