Shillong, July 7: The Indian stock market faced a downward trend on Friday, influenced by weak global cues and profit booking. The Nifty index opened lower and remained in negative territory throughout the session. It eventually closed near the day’s low, experiencing a loss of 166 points (-0.8%), settling at 19,332 levels.
Siddhartha Khemka, the Head of Retail Research at Motilal Oswal Financial Services, highlighted that the broader market also ended in the red. The Nifty mid-cap 100 recorded a decline of 0.8%, while the Nifty small-cap 100 saw a drop of 0.4%.
As per IANS, With the exception of PSU banks and the auto sector, all other sectors concluded in negative territory. The FMCG, realty, and private banks sectors were among the top losers, according to Khemka.
Globally, sentiment turned sour following strong US private jobs data, which increased the likelihood of interest rate hikes by the Federal Reserve in its upcoming meeting.
On the domestic front, profit booking was observed at higher levels after a notable 4% surge in the market over the past eight trading sessions, as stated by Khemka.
Joseph Thomas, the Head of Research at Emkay Wealth Management, noted that after a significant surge in the past few weeks, the market displayed signs of weariness and closed lower by the end of the week. The US data indicating a possible rate action from the Federal Reserve in its next meeting led to a decline in overseas markets on Thursday.
Thomas explained that there is a growing narrative suggesting that inflation may persist longer than currently anticipated, considering the prevailing conditions in the US and Europe. Consequently, the expected rate action would be in an upward direction, leading to short-term turbulence.
Vinod Nair, the Head of Research at Geojit Financial Services, stated that the Indian market succumbed to profit booking as the heat waves from weak global markets reached its shores.
Global equities declined due to a surge in US bond yields, driven by expectations of a prolonged high-interest rate environment following a significant increase in US private payroll data. Investors are eagerly awaiting the release of crucial US non-farm payroll and unemployment data, which will provide further insights into the Fed’s policy direction ahead of its July meeting.
