BSE Sensex logs 2% weekly fall on US poll blues

The BSE Sensex lost over 2% to end the week at 27,274 -- a nearly four-month low -- and the Nifty crashed below the key 8,500-mark, mirroring global turbulence amid pointers that the US presidential election due on November 8 is headed for a tight finish.

The weekly loss of 667 points includes that of the Muhurat session.

Sentiment took a downturn in line with weakness in global indices after opinion polls indicated that Republican Donald Trump and Democrat Hillary Clinton are neck and neck in the race for the top job.

The market found itself in a spot of bother after one poll showed that Trump holds a slight lead over market favourite Hillary Clinton, which rattled investors.

Anxiety deepened, given Trump's stance on several issues, including foreign policy and trade relations.

The renewed focus on the upcoming US poll offset strong domestic PMI numbers and the outcome of the GST Council meeting which finalised the tax structure.

The investors are keenly tracking key central bank meetings, including those of US Fed Reserve and Bank of Japan.

The selling pressure intensified as pharma stocks took the biggest knock amid reports of a likely US federal probe of Indian drug companies on the issue of price collusion.

The 30-share Sensex resumed higher at 28,066.32 and hovered between 28,095.71 and 27,193.61 before ending the week at 27,274.15, a loss of 667.36 points, or 2.39%.

The NSE Nifty also fell 204.25 points, or 2.36%, to close the week at 8,433.75, after shuttling between 8,678.25 and 8,400.25.

Maximum losses came from healthcare, realty, oil and gas and PSUs. Capital goods, banking, consumer durables, power, IT and technology too suffered as also second-line shares of mid-cap and small-cap companies.

The Sensex fell for five-straight sessions. The market remained closed on Monday, on account of Diwali Balipratipada. Meanwhile, foreign portfolio investors (FPIs) and foreign institutional investors (FIIs) sold shares worth Rs 1,847.72 crore during the week, as per Sebi's record including the provisional figure of November 4.

In the broader market, heavy selling was witnessed in mid-cap and small-cap stocks. The BSE mid-cap index slumped 568.74 points or 4.24% to settle at 12,839.53. The BSE small-cap index tanked 576.55 points or 4.29% to settle at 12,877.48. The fall in both these indices was higher than the Sensex's decline in percentage terms.

Among the sectoral indices, healthcare fell by 7.47%, followed by realty 6.16%, oil&gas 4.93%, capital goods 3.58%, banking 2.70%, consumer durables 2.55%, power 2.48%, IT 2.05%, teck 2.04%, auto 1.62%, metal 0.29% and FMCG 0.09%.

Among the 30-share Sensex pack, 26 stocks fell and remaining four stocks rose during the week.

Sun Pharmaceutical Industries slumped 12.24%. As per reports, prosecutors at the US Federal Reserve may bring charges of price collusion against a group of generic drugmakers before the end of the year. It was followed by Dr Reddy 8.42%, ONGC 6.34%, Adani Ports 6.03%, SBI 5.82%, Cipla 5.21%, Lupin 4.66%, Reliance 4.53% and Tata Motors 4.43%.

M&M was the major gainer by 4.71%. Shares of cigarette major ITC gained 2.70%. Fears of goods and service tax (GST) overhang has subsided after GST council has finalised four-tier tax structure. Earlier, there were uncertainties about charging higher tax on tobacco post GST. ITC gets over 45% of its revenue from tobacco products. It was followed by HUL 1.10% and NTPC 0.49%.

The total turnover during the week on BSE and NSE declined to Rs 15,202.41 crore and Rs 86,479.33 crore, respectively, as against last weekend's level of Rs 16,579.80 crore and Rs 1,10,303.38 crore. 

Bullion:

Gold prices surged to mark third weekly gain on the back of sustained offtake from investors and demand from stockists and jewellers in view of ongoing festive season driven by bullish global sentiment.

The buying gained momentum as the country geared for the wedding season with ongoing festival of Diwali.

Globally, the race for the US presidential election supported the gold prices which witnessed a sharp gain of over 2% for the week, ever since the FBI announced an investigation into Democratic candidate Hillary Clinton's emails, uncertainty over the outcome of the election has peaked, with markets not ruling out the possibility of a victory for Republican Donald Trump.

Elsewhere, silver too maintained its second weekly gain owing to robust industrial demand.

In worldwide trade, gold futures settled with a gain to tally a more than 2% climb for the week, as uncertainty surrounding the UK's exit from the European Union and the coming US election raised the metal's attractiveness as a haven.

New York gold prices saw a weekly gain of 2.2%, which marked the metal's fourth-consecutive weekly gain, while NY silver paring its weekly rise to roughly 3.2%.

Forex: The rupee made further advances against the US
dollar, appreciating by 9 paise to end at 66.70 on sustained selling of the American currency by exporters and corporates amid global market turbulence.

Trading has been shallow and extremely thin during the week with a host of market participants preferred to stay on the sidelines due to renewed uncertainty over the potential outcome of the US presidential election and confusing signals from the US Federal Reserve.

Smooth dollar supplies following suspected RBI intervention through state-run banks predominantly helped the home currency to withstand initial volatility and outperform.

However, massive sell-off in domestic equities and subsequent unwinding of long market positions by FIIs restricted the rupee gains, a forex dealer said.

Excess volatility and movements of the US dollar in global trade also weighed on trade.

At the Interbank Foreign Exchange (Forex) market, the local unit resumed higher at 66.72 from last Friday's closing value of 66.79.

But later fell back sharply to hit a low of 66.8600 on dollar demand from importers and also tracking volatility in stocks before staging a solid rebound towards the fag-end despite the general sentiment surrounding the forthcoming US election, which kept investors nervous going into the weekend, It finally settled at 66.70, revealing a gain of 9 paise, or 0.13% after briefly climbing a high of 66.6750.

Marking the second straight week rise, rupee has made a good 19 paise move.

In cross-currency trades, rupee retreated sharply against the pound sterling to end at 83.30 from from last weekend's level of 80.99 and also tumbled against the Japanese yen to close at 65.21 from 63.43 per 100 yens.

The domestic unit remained under pressure against the euro and finished at 74.03 from 72.94 previously

In the meantime, country's foreign exchange reserves improved further by $16.6 million to $367.157 billion for the week ended October 28.

FIIs remained sellers for the second straight week and offloaded shares worth $225.06 million as per Sebi's record.

In the forward market, premium for dollars showed a mixed trend due to lack of market moving factors.

The benchmark six-month forward dollar premium payable in April 2017 changed a little to 173.5-175.50 paise from 174.5-175.50 paise, while the far-forward contracts maturing in October edged higher to 349-351 paise from 347.5-348.5 paise last weekend.

RBI fixed the reference rate for the $at Rs 66.72 and euro at Rs 74.05 against preceding week's level of Rs 66.85 and Rs 72.90, respectively.

In worldwide trade, the American dollar lost more ground and slumped to a fresh one-month low against all major emerging market currencies on nervousness ahead of next week's US presidential election even solid U.S. jobs and macro data outcome failed to change the market expectations for a Federal Reserve rate hike next month.

Sentiment also turned shaky on the back of a sudden political uncertainty after a new poll indicated Donald Trump lead in the US presidential election, which spooked market participants.

The overall trade deficit declined by more than expected in September by $4.1 billion in September to a 19-month low of $36.4 billion.

The US dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, ended the week sharply down at 96.94 from 98.31 previously.

Meanwhile, pound sterling rebounded smartly to hit a four-month high after the High Court ruled that the U.K. The government needs parliamentary approval to trigger Britain's exit from the European Union and the Bank of England stood pat on interest rates.

Crude prices remained weak on skepticism about whether OPEC members will adhere to planned production cut amid a steep rise in the US crude inventories.