After Q4FY18 Markets In Search Of New Triggers

In spite of upbeat GDP data, profit-taking gradually pushed the domestic indices lower. Besides, the continuous decline in the broader market was the major dampener.


After Q4FY18 Markets In Search Of New Triggers

The domestic equities witnessed see-saw trade in the last couple of weeks, with the bears retaining an upper hand. The government reported 7.7 per cent GDP growth for January-March period, earning the tag of the fastest growing economy in the world. The full FY18 growth estimate was revised upward to 6.7 per cent from 6.6 per cent in the second advance estimate released in February. In spite of upbeat GDP data, profit-taking gradually pushed the domestic indices lower. Besides, the continuous decline in the broader market was the major dampener.

Most of the global markets traded in the red in the past couple of weeks with only Nasdaq delivering returns of over 2 per cent. In the last two weeks, Dow Jones slipped 0.32 per cent, whereas S&P 500 and Nasdaq gained 0.80 and 2.72 per cent, respectively. In the European markets, UK’s FTSE100 slipped 0.99 per cent. Germany’s DAX and France’s CAC40 decreased 2.70 per cent and 2.65 per cent, respectively. Among Asian markets, Hang Seng was down 1.79 per cent during the fortnight, whereas Nikkei delivered negative returns of over 3.3 per cent in the same period. China’s Shanghai exchange, with a fall of 3.70 per cent, was the worst performing index. 



On the domestic front, bearish sentiments prevailed in the Indian equity markets. Sensex remained almost flat with gains of just 0.16 per cent while Nifty slipped by 0.03 per cent. All the sectoral indices, except Bankex and Auto, traded in the red during the period under consideration. The small-cap and mid-cap index slipped by 6.39 per cent and 2.27 per cent, respectively, during the two-week period. The Realty index led the downfall in the domestic markets with a loss of 7.72 per cent, followed by Power index which fell by 4.38 per cent. The FMCG and IT indices witnessed a decline of 2.75 and 0.2 per cent, respectively, in the fortnight. The Auto index added 0.45 per cent, whereas the Bankex gained 1.20 per cent.   

The FIIs have been net sellers, having sold equities to the tune of Rs 5934 crore; whereas the domestic institutional investors have been net buyers and have lapped up equities worth Rs 6525 crore. The foreign investors have been consistently pulling money out of India. Their overweight position on India has declined significantly in the recent past. 

The gold prices have been moving within a range for the past few weeks. The sluggish local demand from jewellers, coupled with weakness in international market, put pressure on domestic gold prices. The oil prices eased out on record US production and increase in OPEC crude oil output. The prices slid towards $75 per barrel from the three-year high of $80 per barrel. 

  

With the earnings season behind us, the investors on Dalal Street will follow the updates on how monsoon pans out in the country in the coming weeks. Investors will also closely track the G7 summit, which will be held in the second week of June in Quebec, Canana.