Sensex, Nifty extend losses for 5th straight week amid inflation and weak global cues

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India Weekly Report

Sensex, Nifty extend losses for 5th straight week as inflation, weak global cues dent sentiments

It was another bad week for Indian investors as the market closed negative every single trading day. The Indian market saw a sharp decline this week as investors are worried about growth expectations amid elevated inflation levels.

Nifty daily movement 

The Indian market on Monday started the week in red amid weak global cues. The small and mid-caps index suffered the most and ended over 2% lower. The market was led down by industry heavyweight Reliance industry.

On Tuesday, the market opened on a positive note but ended with losses as the major indexes gave up all the gains in the last hours of trade, closing negative for the third straight session. Tata Steel had the biggest fall on the day, the stock tumbled 7%

As the investors waited for the US inflation number on Wednesday, the market remained volatile. The surging inflation and fear of monetary tightening kept the investors worried. The market gave up the initial gains to close with losses for the fourth straight session as oil prices increased.

As the US inflation number exceeded expectations, the Indian market reacted negatively and opened lower on Thursday. The shares tumbled, and the rupee hit an all-time low amid a global sell-off. The rupee dropped as much as 0.5% to 77.6313 per dollar on Thursday. Small and Midcap indexes continued to slide.

The market opened on a positive note on Friday and remained green for most of the day. However, heavy selling was in the last 90 minutes, and the market closed negative for the sixth straight session.

Highlights of the week:

LIC IPO: The LIC IPO closed subscription on Monday. and the issue was subscribed 2.95 times, led by strong demand from retail investors, employees, and policyholders of the insurer. The allotment was out on Friday. Investors who were not allotted shares may see the initialization of refunds on May 13. To know how to check IPO allotment, check this link.

Quarterly Results: The Indian company continued to report results for Q4FY22. Asian Paints missed estimates with a one-time exceptional loss though the revenue increased. Check the details here. Tata Motor reported results for the fifth straight month, check out the detailed report here. L&T reported a good topline and bottom-line but missed the estimate. Check the details here. SBI reported good results, but the topline was below the street estimate.

Retail inflation: Retail inflation surged to a near 8-year high of 7.79% in April, persisting above the Reserve Bank of India’s inflation target for the fourth straight month. High price levels of fuel and food items like vegetables, spices, and oils/fats, along with household services, contributed to the sharp rise in inflation. The food price inflation surged to a 17-month high of 8.38% in April from 7.68% in March. Rural inflation rose to an 8-year high of 8.38% in April, while urban inflation was at an 18-month high of 7.09%.

Indian Rupee slide: The value of the Indian Rupee fell to its all-time low against the Dollar. It tumbled below 77.50 per dollar this week. Rising treasury yields in the US are one of the major reasons for this. In India, the value of the rupee is depreciating due to massive selling by foreign investors.