The BSE Midcap and the BSE Smallcap indices pared all intraday gains to end 0.3% and 0.5% lower
The benchmark indices on Friday extended losses to end lower as global markets dipped after the United States launched cruise missiles against an airbase in Syria, while back home expectations of no further rate cuts this year by Reserve Bank of India (RBI) also impacted the sentiment.
The S&P BSE Sensex ended at 29,706, down 221 points, while the broader Nifty50 settled at 9,198, down 64 points.
In the broader market, the S&P BSE Midcap and the S&P BSE Smallcap indices pared all intraday gains to end 0.3% and 0.5% lower.
The breadth, indicating the overall health of the market, turned negative. On the BSE, 1,620 shares declined and 1,293 shares rose. A total of 129 shares were unchanged.
"Risk appetite took a hit after geopolitical tensions pulled global equities down. Soaring oil prices and continuing strength in rupee also distorted the usual sectoral diversification themes. But investors will have a lot to look forward to as Q4 results start trickling in soon, and as NPA resolution measures are also expected shortly,” said Anand James, Chief Market Strategist, Geojit Financial Services.
Meanwhile, the rupee surged to 20-month high, by extending gains to as much as 64.15 per dollar, its highest since August 2015.
Bonds, however, extended falls, with sentiment also hit after the RBI said it would start curbing excess liquidity after the government's move to withdraw higher-value bank notes from circulation led to a surge in bank deposits.
The benchmark 10-year bond yield rose 5 basis points to 6.82% after rising 12 basis points on Thursday.
Sectors and stocks
Nifty Pharma index (down 1.6%) was the leading sectoral loser. Sun Pharma (down 2%), Lupin (down 2.7%) and Dr Reddy's (down 2.3%) shed the most.
Sun Pharma was the top loser on Sensex and Nifty and tanked as much as 3.5% after the US drug regulator found storage and logistics lapses during a surprise visit to Dadra facility, a media report stated.
IT stocks showed mixed trend as rupee strengthened against the dollar. Infosys (down 1%), Wipro (down 0.08%), HCL Technologies (down 0.4%) and Tech Mahindra (down 1%) declined, while TCS (up 1.2%) was the top gainer on Sensex.
A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports.
Among gainers, telecom stocks Bharti Airtel and Idea Cellular rose up to 3% in intraday trade after rival Reliance Jio Infocomm, a unit of Reliance Industries, withdrew its summer surprise offer to subscribers.
Avenue Supermarts, which runs a chain of retail stores under the D-Mart brand, rallied 14.5% to Rs 760, extending its Thursday’s 5% gain on the BSE after rating agency CRISIL upgraded its ratings on the bank facilities of the company.
The Nifty Realty index also erased all gains to shed over 1%. The index rose to its highest in nearly two years in the previous session after the central bank on Thursday said it has allowed banks to invest in real estate investment trusts (REITs) and infrastructure investment units (InvITs) within regulations prescribed by the Sebi.
Global markets
European markets opened lower as geopolitical concerns grew after the United States launched cruise missiles against an air base in Syria. The pan-European Stoxx 600 was 0.32% lower with most sectors in negative territory. France's CAC 40 was down 0.3%, while FTSE 100 was flat with negative bias.
Asian markets ended mixed. China's Shanghai Composite and Hong Kong's Hang Seng gained 0.2% and 0.4%, respectively, while Taiwan's TSEC shed 0.2% and Japan's Nikkei ended flat.
US equity index futures were lower on Thursday. S&P 500 e-mini futures ESv1 were down 0.5%, indicating a lower open on Friday.
Photograph: Shailesh Andrade/Reuters