Software, pharmaceutical shares drag Indian shares lower on week
MUMBAI (NewsRise) -- Indian shares ended little changed Friday but fell for the week, with the Nifty index recording its first decline in six weeks as export-driven information technology and pharmaceutical stocks struggled.
The benchmark BSE Sensex fell less than 0.1%, or 19.33 points, to 31,056.40 on Friday, while the broader NSE Nifty 50 ended 0.1% higher, adding 10 points, to end at 9,588.05. For the week, the Sensex declined 0.7%, while the Nifty fell 0.8%, marking its largest weekly drop this year.
"Investors are pulling out from the pharma and IT sector due to negative news flow," said G. Chokkalingam, Founder and Managing Director at Equinomics. Looking forward, "the advancement and distribution of monsoon rains would be key for markets."
"There is a chance of 10% rise in the markets by the end of the current year due to improved earnings," Chokkalingam added.
Seventeen of the 30 constituents of the Sensex ended lower on Friday, while advancing issues edged past declining ones 1,340 to 1,332 and 155 stocks were unchanged.
Software stocks were the key losers for the week, continuing their underperformance in 2017 amid weak revenue growth performance stemming from the rupee's strength against the U.S. dollar, a global economic slowdown and concern over unfavorable changes to the visa norms in the U.S., their main market.
Tata Consultancy Services-India's biggest company by market value - ended down 0.6% at 2,397.45, taking its weekly loss to 4.5%. Chief Executive Rajesh Gopinathan on Friday at the company's annual meeting said they are investing in digital and new technology areas.
Peer Infosys declined 1.2% to 940.50 rupees, shedding 0.9% for the week. On Friday, Infosys announced that long-time veteran Sandeep Dadlani, the president and head of its Americas business and manufacturing and retail software divisions, stepped down from the company. Smaller rival Wipro finished 2.2% lower at 254.95 rupees, taking its weekly loss to 3.1%.
Most pharmaceutical stocks ended lower amid concerns of a decline in revenue in coming quarters owing to pricing pressures in the U.S. - their key market, and scrutiny from the Food and Drug Administration.
Smaller drug company IPCA Laboratories slumped 8.1% to 471.70 Friday after saying the U.S. FDA banned the sale of drugs manufactured at two of its facilities due to non-compliance of manufacturing practices.
Reliance Industries, the country's biggest private company by revenue, led among gainers for the week, rising 3.9%. It added 0.2% to 1,387.85 rupees on Friday. The conglomerate's telecom arm added about 4 million new users to its network in April, the highest in the industry, regulatory data showed.
Late Thursday, the company and Britain's BP Plc announced they would jointly invest $6 billion to develop deep water gas fields in India's KG-D6 block, as they agreed to expand their existing alliance to explore new opportunities in the country's energy sector.
Cigarette and consumer goods maker ITC - which is among the highest weighted stocks on the Sensex - rose 1.5% to 306.30 rupees Friday on defensive buying.
Most other regional indexes also declined this week amid concern that the U.S. Federal Reserve's rate increase and indications for further tightening could unravel largely accommodative monetary conditions that have prevailed since the 2008 financial crisis. For the week, China's Shanghai Composite index declined 1.1%, while Japan's Nikkei 225 index fell 0.4%. Hong Kong's Hang Seng index slipped 1.6% and South Korea's Kospi index ended down 0.8%.
--Dhanya Ann Thoppil