For the week ended May 18, 2018, Nifty 50 and benchmark Sensex index dropped 2% each on the back of several macroeconomic concerns as well as political drama in Karnataka that continues to jolt the Indian equity market.
On Friday, Sensex shed 300 points to close below the crucial 35,000 mark at 34,848 while at the same time Nifty also broke down to 10,596 with a decline of 86 points.
In the last five sessions, Nifty Midcap index and Nifty small cap index lost 3% and 2.4% respectively.
Sector-wise, Nifty PSU bank lost 6% to be followed by Nifty Infra and Nifty Energy down 3.5% each, Nifty Auto slipped by as much as 3.4% and Nifty Pharma also was dragged lower by 2.4% for the week that ended on May 18, 2018.
This drop has come amid political uncertainty in the key state of Karnataka wherein the Supreme Court ruled out extension of time to BJP to prove its majority and ordered a floor test in Karnataka Assembly due later today at 4 pm. Meanwhile rising crude oil prices that breached US$ 80 level for the first time since November 2014 also weighed on the equity markets.
Retail inflation for the month of April climbed higher at 4.58% as against 4.28% on the back on rising petrol and diesel prices and other items. WPI also hit a 4-month high of 3.18% for the April month.
The benchmark 10- year bond yield also is seen rising continuously and has reached 7.84% level which will not augur well for Indian stocks.
Also, the recent developments in U.S.-China trade negotiations saw a new turn as U.S. President Donald Trump said on Thursday that China , Europe and some other nations had become "very spoiled" on trade with the United States and that US cannot allow that to happen anymore.
The week saw many companies announce their Q4FY18 results, of which PNB, Voltas, Hindalco and TVS Motor missed street estimate while few others including the likes of Bajaj Finance, Tata Steel, Lupin, JK Tyre, and JSW Steel reported better results.
On the last day of the week, over 160 companies recorded their 52-week lows. Among the top-midcap losers in trade are companies such as Allahabad Bank with a drop of 18.5%, PC Jewellers (down 18%), Syndicate Bank (down 16%), PNB Bank (15%).