Nifty sees worst week in 2 years as growth concerns weigh; all sectoral indices in red

Indian markets slipped for a 2nd straight week to post their biggest weekly loss since May 2020 as investors remained concerned about global growth outlook. Nifty lost 5.6% during the week which also saw rates by global central banks.

Daily Nifty Movement

The market crashed on Monday as all the sectoral indices ended in the red - the financial sector was the worst hit. The 10-year bond yield touched 7.60%, which was the highest level since February 2019.

The Indian market continued its losing streak on Tuesday and ended the volatile day in the red, dragged by Metals. Retail Inflation came at 7.04%, in line with estimates, while WPI inflation stood at 15.88% for May.

The major indices were down for the fourth consecutive day on Wednesday dragged by the IT and Metal sectors. The investors waited for the US Fed's decision on the interest rate. The rupee remained stable at the 78 mark after hitting a record low on Monday.

The Indian market hit a fresh 52-week low as the market gave away all the gains from the first half on Thursday. The Midcap index was trading below 20% from its record high. The airline stocks were impacted by a sharp hike in jet fuel prices.

The market closed in the red on Friday after swinging on both sides throughout the trading day. The market failed to close in the green on any five trading days. The fall was led by the IT, Pharma, and Oil & Gas sector.

Key highlights of the week:

Inflation Data - For the month of May, retail inflation stood at 7.04%. The data was in line with the estimate of 7.1%. The CPI inflation has now been above RBI's medium-term target of 4% for 32 consecutive months. The highest change was seen in two volatile components - food and fuel. The food index increased by 1.5% MoM, while fuel & light increased by 1.4%. Check our complete report here.

Rupee at a record low - The Indian rupee hit an all-time low of 78.14 on Monday morning this week. For the rest of the week, it continued to stay around the 78-level mark. The rupee is falling due to inflation worries, FII selling, Crude Oil price, the dollar index inching higher, and Fed's aggressive stance to bring inflation down. Check the details here with the impact the falling rupee has on the Indian economy.

Export and trade deficit - India’s total exports, including goods and services, grew 24% over a year ago to $62.21 billion in May. The trade deficit also rose sharply to $15.44 billion in the month compared to a $1.38 billion trade surplus in the same month last year on the back of a 59% spike in imports to $77.65 billion.

LIC continues to slide - LIC shares have fallen 30% from the IPO price. In a recent interview, M. R. Kumar, the Chairman of LIC, said that he expects VNB Margins to be 15-16% over the next 3-5 years. On the current stock decline, he suggested the market itself is down, and investors should not worry and wait patiently for the medium term.