Stocks mark 2nd weekly fall in a row amid fund outflows

Indian stock indices fell for a second straight week, as a subdued start to the earnings season and weakness in asian markets worsened investor sentiment.

The key domestic equity indices – BSE’s Sensex and NSE’ Nifty – shed over 2.5 per cent each during the week.

October has seen a massive outflow of funds, as investors pulled out from emerging markets to redeploy their capital into safe-havens such as the US securities.

According to data provided by the National Securities Depository (NSDL), monthly outflow of foreign funds at Rs 24,186 crore from the equity segment was at its highest so far in October.

The NSDL website has data from 2002, as Indian markets received minuscule funds from foreign investors prior to that, said Deepak Jasani, Head of HDFC Securities.

So far this year, foreigners have pulled out Rs 37,403 crore from equities, the largest since 2008 when they had withdrawn Rs 51,252 crore in the wake of the global crisis.

For the week ended October 26, the S&P BSE Sensex lost 966.32 points, or 2.81 per cent, to close at 34,315.63.

The 5o-share Nifty of the National Stock Exchange pared 273.55 points, or 2.65 per cent, to settle at 10,303.55.

In the week gone by, companies such as ICICI Bank, Yes Bank, Bharti Airtel, ITC, Bajaj Auto and Maruti Suzuki announced their financial results for the quarter ended September 30.

Bharti Airtel on Thursday reported a 65.4 per cent on-year fall in its consolidated net profit, while private lender Yes Bank logged a decline of 3.73 per cent in its standalone net profit for the second quarter.

“Markets corrected for a second consecutive week. Advance-to-decline ratio was positive in one of the five trading sessions. The only sectoral gainer was realty. The top sectoral losers were IT, pharma, bank, FMCG and metals,” Jasani said.

Provisional figures from the stock exchanges showed that foreign institutional investors sold shares worth Rs 5,751.17 crore during the week, whereas domestic institutional investors bought Rs 4,508.62 crore worth of stocks.

Figures from the NSDL showed that foreign portfolio investors divested Rs 4,563.31 crore, or $622.5 million, in the equities segment during the week ended October 26.

The Indian rupee closed at Rs 73.46 to a US dollar on Friday, weakening by 14 paise from its previous week’s close of 73.32.

According to Mustafa Nadeem, CEO, Epic Research: “The global markets saw a sharp decline with S&P plummeting below 2,700 mark while DJIA was trading below 25,000, also below its 20 SMA (simple moving average), a short-term measure to know the trend of the market.”

Further, the Chinese yuan depreciated significantly, reflecting caution among investors about China’s slowing economic growth. The yuan was trading around 6.94 per dollar.

The week saw only four gainers on the Sensex led by Bharti Airtel (up 4.24 per cent at Rs 299), HDFC (up 2.63 per cent at Rs 1,705), Coal India (up 1.83 per cent at Rs 280.80), and ICICI Bank (up 0.05 per cent at Rs 315.05).

The major losers were Yes Bank (down 17.06 per cent at Rs 180.55), Sun Pharma (down 9 per cent at 553.65 ), IndusInd Bank (down 8.33 per cent at Rs 1,445.10), Infosys (down 7.19 per cent at Rs 633.50), and TCS (down 6.13 per cent at Rs 1,799.60) per share.

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