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Indian shares fell for a third consecutive session on Friday to post a weekly loss, tracking weak global markets as caution prevailed about the possibility of an interest rate hike by the US Federal Reserve as early as June.
Adding to these expectations, New York Fed President William Dudley - a permanent voting member of the central bank's rate-setting committee - had said on Thursday that the US economy could be strong enough to warrant a rate increase in June.
The 30-share BSE index Sensex ended lower by 97.82 points or 0.39 per cent at 25,301.90 and the 50-share NSE index Nifty ended down by 33.7 points or 0.43 per cent at 7,749.70.
Barring infrastructure and FMCG, all other BSE sectoral indices ended in the red. Among them, realty index fell the most by 1.42 per cent, healthcare 1.39 per cent, capital goods 0.75 per cent and oil & gas 0.56 per cent, while infrastructure index was up 0.51 per cent and FMCG 0.19 per cent.
Top five Sensex gainers were Adani Ports (+3.49%), ITC (+1.55%), ONGC (+1.4%), NTPC (+1.00%) and Bajaj Auto (+0.83%), while the major losers were Lupin (-9.1%), ICICI Bank (-2.44%), Reliance (-1.73%), M&M (-1.17%) and Cipla (-1.04%).
Domestic sentiment was also hit as investors turned wary after capital market regulator SEBI tightened its guidelines to check any misuse of P-notes.
SEBI has further reduced room for manoeuvre for foreign investors buying Indian equity through offshore derivative instruments (ODI), the most popular of which are P-notes (participatory notes), in a decision taken at its board meeting here on Thursday.
For starters, P-note holders will now be subject to the same Know Your Client (KYC) requirements as domestic investors.
A report by SMC Global said: "Asian stocks swung between gains and losses as investors assess what a US interest-rate increase as soon as next month will mean for global economic growth. US stocks recovered some of the early losses but ended lower on Thursday on mounting fears that the Federal Reserve's next interest-rate hike could come as early as June. US leading economic index climbed by 0.6 per cent in April, while revised data showed no change in March. Economists had expected the index to rise by 0.4 per cent compared to the 0.2 per cent uptick originally reported for the previous month."
European shares were higher in early trading on Friday, helped by gains in Asia overnight and stronger oil prices, with UniCredit leading the gainers on talk of possible asset sales.
The pan-European FTSEurofirst 300 index, which had fallen 1.2 per cent in the previous session, was up 0.9 per cent by 0708 GMT. Miners and oil stocks were the top sectoral gainers, underpinned by stronger commodity prices.
Asian shares edged up on Friday but were on track for a weekly loss, while the dollar was poised for a winning week on bets the US Federal Reserve could raise rates as early as next month.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.6 per cent, though still down 0.3 per cent for the week and off 4.2 per cent so far this year.
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