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Growth projections fail to boost market

Statesman News Service | Mumbai |


After the World Bank, global rating agency Fitch today projected India’s economic growth for the next year to 7.3 per cent and further to 7.5 per cent in 2019-20. But for the current fiscal that ends on 31 March, it’s growth outlook is 6.5 per cent which is lower than the Central Statistics Office’s 6.6 per cent.

The encouraging reports of the World Bank and Fitch, however, failed to enthuse the market which continued to drag further down amid
lacklustre trade with downside bias.

The 30-scrip Sensitive Index of Bombay Stock Exchange and 50-scrip Nifty of National Stock Exchange again eluded any recovery as traders kept booking profit in bigwigs such as Reliance Industry and ICICI Bank.

The volatility continued to edge down indices across Asia-Pacific in tandem with overnight fall in Wall Street market which was down for the third straight session after President Donald Trump insisted on imposing harsh trade/tariff restrictions on China that may break out into a global trade war.

The Morgan Stanley Composite Index (outside Japan) for Asia-Pacific was down 0.45 per cent. The Sensex closed at 33,685.54 (-150.20) points losing 0.44 per cent. Nifty was down 0.49 per cent at 10,360.15 (-50.75) points.

Bank shares were under stress like their assets, say analysts, following the Reserve Bank of India’s action to scrap letters of undertaking or LoUs with immediate effect.

Banks lost ground irrespective of RBI’s clarification that banks would continue to extend capital to businesses but in a transparent way. Nifty Bank failed to recover like yesterday as it closed at 24,791.85 (-59.80) points down 0.24 per cent for the day.

Nifty PSU Bank lost 0.73 per cent at 2,940 (-21.75) points. Analysts say the year 2018 is unlikely to match returns to investors of 2017 which ended on a dream lucrative run giving bountiful returns to retail investors.

The markets are likely to be volatile in the near-term as foreign and domestic funds appear busy reshuffling allocations to various sectors. Recently there has again been a spurt in buying mid-cap shares of the companies that are displaying much transparency in their earnings data.

This has led to increase in mid-cap indices while equity benchmarks such as Sensex and Nifty reel under selling pressure.

Analysts say, re-allocation of investment funds was necessary for fund managers who are struggling to retain retail or household investors’ interest in equity market.

In Sensex seven shares advanced and 24 declined. For Nifty the ratio was 13:27. The gainers in BSE benchmark included Asian Paints at Rs 1,161.85, up 2.22 per cent and M&M Rs 733.60, up 0.67 per cent.

Among the losers were Yes Bank at Rs 312.20, down 2.10 per cent; RIL Rs 912, down 1.79 per cent and ICICI Bank Rs 301, down 1.75 per cent.