ShareKhan Newsletter Blog

 Market Commentary 

Mkts take a pause after 3 winning weeks; Nifty ends below 5,900

The Indian markets wrapped up the week ended December 14, 2012 in the red zone breaking the gaining trend of last three-weeks. The Sensex ended 0.55% lower, while the Nifty fell 0.47% in the week.

Major Headlines for the week:

• IIP for October at 8.2% beats estimate 
• Consumer price inflation at 9.9% in November 
• Inflation for November at 7.24% vs 7.45% in October 
• Domestic car sales down 8% in November month 
• November exports disappoint; imports gain 
• India's forex reserves down by $471 mn 

Indian indices
After seeing a rally in the previous three-weeks, the Indian markets reversed the gaining trend by ending the week ended December 14, 2012 in the red terrain. Volatility ruled the markets this week despite positive October IIP data and November Inflation numbers, which came below the estimates. The Sensex shut shop 0.55% lower and the Nifty slipped 0.47% in the 50th trading week of 2012. Markets ended lower in four out of five trading sessions owing to selling pressure across the board. The BSE Mid-Cap and Small-Cap indices shed over 1% each.

Adding further, foreign institutional investors (FIIs) continued to remain positive for the month of December 2012.

The BSE Mid-Cap index fell by 1.01% and the BSE Small-Cap index was down by 1.24%. Both these indices underperformed the Sensex.

The BSE Sensex declined 106.85 points or 0.55% to settle at 19,317.25 while NSE Nifty dropped 27.80 points or 0.47% to settle at 5,879.60 in the week ended December 14, 2012.

Major events of the week:

• The Index of Industrial Production (IIP) for October 2012 came in at 8.2% versus -0.7% (revised from -0.4%) seen in September 2012, better than estimates.
  

• The monthly Inflation fell to a 10-month low of 7.24% in November, from 7.45% in the previous month, fuelling hopes of a rate cut by the Reserve Bank of India (RBI).
  

• India's annual consumer price inflation (CPI) accelerated to 9.9% in November from the previous month, government data showed on Wednesday (December 12, 2012). 
  

• Car sales in India declined by 8% in month of November, dashing hopes of a sustained revival in demand, as an expected festive season boom failed to materialise in a key growth market for global carmakers.

Weekly market trend from December 10 - December 14, 2012:

• Trading for the week began on a positive note. Key benchmark indices declined on December 10, 2012, Indian markets resumed the trading session on a positive note but could not sustain morning gains till the end. The Sensex ended down by 14.41 points to close at 19,409.69 and the NSE Nifty advanced 1.50 points to end at 5,908.90.

• On December 11, 2012, the Indian markets closed trading session in the red zone, as investors booked profits after data showing a continued high trade deficit renewed concerns about the current account deficit. The Sensex closed at 19387.14, down by 22.55 points and the Nifty fell 10.10 points to close at 5898.80.

• On December 12, 2012, markets again closed in the red zone, as data showing strong IIP numbers for the month of October 2012 and acceleration in consumer price inflation in November 2012 dashed hopes of a rate cut by the central bank which led the investors to book profits. The Sensex closed at 19,355.26, down by 31.88 points and the Nifty fell 10.80 points to close at 5,888.

• Markets fell for fourth straight day of the week on December 13, 2012, as investors were cautious awaiting the outcome of monthly inflation numbers which would impact the central bank's policy meeting on December 18, 2012. The Sensex shed 126 points to close at 19229.26 while Nifty slipped 36.50 points to end at 5851.50.

• On December 14, 2012, the Indian equities ended on a positive note, on hopes of a rate cut by the Reserve Bank of India (RBI) after November inflation eased unexpectedly. The Sensex ended at 19,317.25, up by 87.99 points while the Nifty closed at 5,879.60, up by 28.10 points.

Global indices:
Global markets closed mixed this week. Top Losers: Nasdaq was down by 0.22%, Dow Jones fell by 0.15%. Top Gainers: Shanghai Composite up by 4.31%, Nikkei rose 3.07%, Hang Seng gained 1.87%, DAX100 rose 1.05%, CAC40 gained 1.04%, FTSE 100 up by 0.12%.

Sectoral and stock screening:
Among the 13 sectoral indices, top gainers- BSE Auto up by 2.07%, BSE Bankex rose 0.58%, BSE HC up by 0.14%. Top losers: BSE CD fell by 4.65%, BSE Power slipped 3.23% and BSE CG was down by 2.59%.

Looking at the 'A' group stocks, the top three gainers of the week were Jet Airways which was up by 14.99%, Oracle Financial Services rose 11.18% and M&M Financial Services up by 8.50%. The top three losers of the week were Gitanjali Gems down by 9.31%, Hexaware Technologies down by 7.82% and JP Power down by 7.80%.

FII/MF activity
The foreign institutional investors (FIIs) were the net buyers of the Indian stocks worth a net of Rs5215.1 crore during the week till December 12, 2012, while the domestic investors were net sellers of Indian stocks to the tune of Rs673.3 crore during the week till December 12, 2012.