Indian equities declined 0.2% on Friday, erasing intraday gains of nearly half a percent on Friday and ending the week lower-the second consecutive weekly loss-as investor sentiment turned tepid due to a lack of triggers after the RBI Monetary Policy. Analysts said that Nifty may continue to trade in a range in the near term.
The NSE Nifty 50 declined 0.2%, or 49.85 points, to close at 23,366.70, while the BSE Sensex moved 0.2% lower, or 116.67 points, to end at 74,243.34. Both indices fell up to 0.8% this week, after dropping by similar levels last week.
"The monetary policy was in line with expectations, but the absence of triggers now that earnings season and policy is behind us led to a choppy trading session," said Sunny Agrawal, head of fundamental research at SBI Securities.
The removal of taxes on government securities for overseas investors offered partial relief to investors, and stoked hopes of tax relief for equities, said Agrawal.
Foreign portfolio investors sold shares worth a net ₹8,776.25 crore on Friday, while domestic institutional investors bought shares worth ₹9,133.57 crore. So far in June, foreign investors have sold shares worth ₹25,831.5 crore.
The India VIX volatility index declined 0.6% to 15.8 on Friday after rising 3% during the day, indicating mildly lower risk perception.
"Investors turned cautious ahead of the weekend, and the large-caps remained under pressure due to sustained foreign selling, but the declines were largely part of market volatility," said Nilesh Jain, VP- head of technical and derivative research at Centrum Finverse.
Jain said that Nifty could trade in a range between 23,150 and 23,700 in the near term, facing hurdles at the higher level of the band.
Of 4,399 shares, 1,993 advanced, and 2,212 declined. The Nifty Midcap 150 index declined 0.3%, while the Nifty Smallcap 250 ended marginally higher.
"Nifty was dragged down this week by IT stocks and could consolidate with downside limited to 23,200-22,700 levels in the near term," said Agrawal.
