Shares closed lower in a choppy session on Friday, dragged by a decline in most sectors in the final hour, as data on the country's current account deficit (CAD) released on Thursday weighed.
The Nifty 50 index closed 0.47% lower at 18,105.30, and the S&P BSE Sensex fell 0.48% to 60,840.74. Both the indexes had gained over 0.4% during the session.
The indexes extended gains for a seventh consecutive year in 2022, but also advanced the least since 2018. Both indexes rose over 4% in a year marked by geopolitical tensions, rate hikes by global central banks and recession worries.
GRAPHIC : Nifty 50 extends gains for seventh year in a row - https://www.reuters.com/graphics/NIFTY-YEAR/YEAR-NIFTY/mopakkrbrpa/chart.png
"2022 was a year of polarisation for Indian equities," said Lakshmi Iyer, CEO - investment advisory at Kotak Investment Advisors. "Central banks’ actions to hike rates may see a plateau in 2023."
GRAPHIC : Sectoral indexes in 2022 - https://www.reuters.com/graphics/SEC-YTD/YTD-SEC/dwpkddbazvm/chart.png
Most of the major sectoral indexes reversed gains on Friday. Financials and fast-moving consumer goods rose 0.4% and 0.52% during the day, before closing down 0.57% and 0.76%, respectively.
"India’s poor CAD number for the fiscal second quarter weighed on the minds of participants," said Deepak Jasani, head of retail research at HDFC Securities. He added that the 18,250 mark remains a crucial resistance for the Nifty 50 index.
India's CAD for the quarter ended September 2022 (Q2FY2022-23) widened to a nine-year high, due to high commodity costs and weak currency, according to data released by the Reserve Bank of India (RBI) on Thursday.
However, analysts said the CAD had likely peaked, and the outlook remained optimistic.
Twenty-nine of the Nifty 50 constituents declined with SBI Life, Eicher Motors and Grasim Industries losing over 1.75%.