After a volatile trading session, domestic market indices Sensex and Nifty closed lower for the second straight session Friday amid mixed cues from global markets. Erasing early gains, Sensex ended 134 points lower at 38,845 and Nifty fell 25 points to 11,490. Yesterday, the 30-share benchmark BSE Sensex closed 323 points lower at 38,979 and NSE Nifty 50 fell 11 points to 11,504. During the week, Sensex ended 8.75 points or 0.02% lower, while Nifty gained mere 40 points or 0.35%.
Sectorally, gains in IT, media, auto, realty and pharma were capped by losses in metal, FMCG, banking and financials. HUL, Bajaj Auto, Maruti, Kotak Bank, HUL and Nestle India were among the laggards. On the other hand, Sun Pharma, followed by Tech Mahindra, Tata Steel, TCS, Titan, PowerGrid, NTPC, Reliance Industries and Asian Paints were among the top gainers on Sensex today.
Asian equities were buoyed today after central banks globally pledged to keep interest rate near zero for a prolonged period to support the economy in coronavirus induced downturn and promised further stimulus if required.
European markets, however, traded lower as investors reacted to the recent central bank meeting outcomes and comments WHO which warned of a "very serious situation" unfolding in Europe.
Weekly cases have now exceeded those reported when the pandemic first peaked in Europe in March, said WHO's Hans Klug. The Bank of England kept its main interest rate unchanged at the record low of 0.1% on Thursday.
Markets in Wall Street closed mostly lower yesterday, taking cues from the weakness seen in the labour market as the situation remains worrisome on coronavirus front with technology shares sliding for a second day.
S Ranganathan, Head of Research at LKP Securities said, "An FTSE Rejig of the Index coupled with a Border Skirmish led to a pretty volatile trading session today. Despite this the day truly belonged to the Pharma Bulls as several counters posted massive gains on the back of positive news flow".
Markets also turned volatile amid rising concerns about economic recovery from the COVID-19 pandemic. Worldwide, there were 303.51 lakh confirmed cases and 9.50 lakh deaths from COVID-19 outbreak. Meanwhile, India's death toll from COVID-19 infections rose to 0.84 lakh and total coronavirus cases to 52.21 lakh as of Friday.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments said, "The markets continue to respect the 11500 level which is heartening for the bulls. The key level to be respected is 11300-11350 and if we can manage that, we should be able to achieve 11800 by the expiry next week."
Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking said, "With a broader view also, we are a bit unsure whether the Nifty has enough strength to go pass the sturdy wall of 11650-11680. For the coming session, 11620-11650-11680 continues to be a strong resistance zone and we advise traders not get carried away by last 2-3 days' upmove. As far as supports are concerned, 11570-11540 would be seen as intraday supports and a move below 11540 would give early signs of weakness."
Nirali Shah, Senior Research Analyst, Samco Securities said," Deriving analogy from the Fed's stance, it can be assumed that ground level economies across the globe would atleast take two-three years to recover from the pain of the global pandemic. And this may keep the disconnect between markets and economy for some more time.
She adde," Nifty50 index closed on a negative note and traded in a very narrow range during the week. Pharma and IT sectors strongly participated to the index while the financial service space underperformed. Nifty is currently trading in an overbought zone which is in sync with the global indices and minor fractures in the form of corrections may continue. The immediate support and resistances are now placed at 11200 and 11630 respectively."
On the currency front, the Indian rupee strengthened by 21 paise to close at 73.45 per dollar on Friday as weak American currency that buoyed investor sentiment.
Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking said," The Indian rupee ended the week with marginal gains of 0.10 percent, wherein the volatility has remained high on the back of US Fed and BoE interest rate decisions. Tracking the decline in Dollar Index, long bets in the domestic unit have surged in line with the other Asian peers. As the US Fed looks inclined to continue with a low interest rate regime for several years to support the economic recovery path, dollar index has remained under pressure. On the other hand, the RBI also seems to have given a pause to its dollar buying spree to build its forex war chest, which has provided room for the local unit to edge higher.
Commenting on Rupee's near term outlook, she added," Going ahead, rupee has strong support at 74 mark, while 72.80 remains a stiff hurdle on the higher side. The Indo-China border tensions will keep the uncertainty alive for the rupee, while the trajectory of dollar index will also provide further cues."