Indices end week in red as blue chips post poor Q2 numbers
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A rally of as much as 1% on the back of Barack Obama's re-election as US president was not enough to prevent Indian equities from ending the week with a marginal decline.
Indian benchmark indices, which touched one-month highs on Wednesday, started giving up the gains on Thursday and deepened the correction on Friday after the September quarter numbers of heavyweights, such as ONGC, SBI and Tata Steel, disappointed the Street.
The 30-share Sensex lost 0.86%, or 162.58 points, while the broader Nifty gave away 0.9%, or 52.5 points, to close the week at 18,683.68 and 5,686.25, respectively.
During the week, both indices shed 0.2%. Market experts believe that after tracking the US presidential election results, the traders have shifted their focus to domestic issues, in turn, capping the market gains.
"Wednesday's rally was in conjunction with the gains made by other Asian markets. However, US markets have declined after Obama's re-election as global investors are now studying the likely outcomes of the US fiscal cliff," said an analyst.
According to UBS global equity strategist Christopher Ferraron, equity markets may not be able to make strong gains unless investors see a solution to the US fiscal cliff that is scheduled on January 1, 2013. "If no solution is negotiated or the deadline is not postponed, the risk aversion may escalate, which could affect the Asian equities negatively," he said.
After opening flat, the benchmark indices begun their descent in early trading hours as stocks like ONGC and SBI started to weigh it down. ONGC's September quarter profit dipped 32% compared to the last year, the highest decline in about four years.
Though SBI's September quarter net earnings jumped 30%, beating expectations, a more-than-expected increase in its bad loans weighed on the stock. For the quarter, gross NPAs advanced to 5.15% compared to 4.2% last year. ONGC slid 3% to R257.10, while SBI declined 3.9% to R2156.35 on the BSE.
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