The Indian equity indices extended losses for the sixth consecutive session weighed down by weak global sentiment, sustained outflow of foreign capital, interest rate hikes by global central banks and soaring inflation.
On June 17, the benchmark Sensex declined 135.37 points, or 0.26%, to close at 51,360.42 and the Nifty ended 67.10 points, or 0.44%, lower at 15,293.50. Broader markets, Nifty Midcap 100 and Nifty Smallcap 100, also reeled under pressure.
Among sectors, most selling was seen in Nifty Oil & Gas, Nifty Pharma, Nifty IT, Nifty Auto, Nifty PSU Bank and Nifty FMCG indices, while Nifty Private Bank and Nifty Financial Services ended in the green for the day.
For the week, the Nifty plunged 5.6% and the Sensex tanked 5.4%. The frontline indices also hit their 52-week lows. All the sectoral indices on the NSE witnessed sharp selling during the week, with Nifty Metals, Nifty IT, Nifty PSU Bank, Nifty Energy and Nifty Auto declining the most.
The week was marked by global events that weighed on risky assets such as the US Federal Reserve hiking interest rates by 75bps and the Swiss National Bank delivering its first rate hike in 15 years.
Continuous dumping of Indian equities by foreign institutional investors (FII) also aided the market losses. The FIIs have so far this month sold Indian shares worth more than Rs 34,000 crore, as per data available on stock exchanges.
During the week, barring Apollo Hospitals which gained marginally by 0.02%, all other Nifty50 constituents ended in the red.
Check out the top Nifty losers for the week –
The state-run oil explorer Oil & Natural Gas Corporation Ltd (ONGC) tanked 14.09% for the week. The stock closed at Rs 142.25 apiece on the National Stock Exchange (NSE) on Friday. However, the stock has remained stable so far in 2022, but in the last one-year time period, ONGC’s stock price surged by more than 13%.
The elevated crude oil prices amid geopolitical tensions and expectations of a further hike in domestic gas prices have turned earnings environment favourable for the upstream PSU.
Hindalco Industries declined 13.49% for the week to close at Rs 334.55 on the NSE. The stock also hit a 52-week low of Rs 325.85 on June 17, 2022. It had touched a 52-week high of Rs 636.00 on March 29, 2022. Hindalco Industries’ shares have fallen more than 29% YTD.
The fall in Hindalco shares comes in line with the weakness in the broader metal index amid fresh COVID-19 restrictions in China, the largest consumer of metal in the world. Meanwhile, the imposition of export duty by the government on iron ore and pellets also weighed down heavily on the domestic metal stocks.
Shares of IT major Tech Mahindra plunged 13.05% during the week ended June 17. It has been top loser in the Nifty IT index for the week. The stock touched its 52-week low of Rs 943.70 on Friday. Tech Mahindra shares are down more than 47% from its 52-week high of Rs 1,838 hit on December 30, 2021.
The weakening outlook for economic growth in the US is weighing on the Indian tech companies. Concerns over a possibility of a potential slowdown in IT services demand going ahead are also dragging the IT index.
Another tech major Wipro also hit a 52-week low of Rs 402.05 on Friday amid weak sentiment. The stock has fallen 12.09% for the week. It is sharply lower than the 52-week high of Rs 739.85 hit in October last year.
The macro risks and the growth slowdown in the US and the European Union (EU), key markets for the Indian IT services industry, are pressuring the stock prices. The revenue growth potential of IT companies comes at risk as high inflation reduces the spending power of corporates.
IndusInd Bank shares fell 11.64% for the week. The private lender touched a 52-week low of Rs 796.75 on Friday, while it had hit a 52-week high of Rs 1,242.00 on October 28, 2021. The stock is down over 9% YTD and 18% in last one year.
As against this, the Nifty Bank fell over 5% this week. It Is down 7.7% YTD and down over 5% in one year.