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 Market Commentary 

Sensex at bottom of global charts for February; Mkts lose over 5% 

The Indian markets have been turbulent in February on the back of global uncertainty and Budget woes. The Sensex tumbled 5.19% and the Nifty fell 5.66% 

Major news for the month

• Union Budget 2013-14: Lacks pragmatism; creates confusion 
• Railway Budget 2013-14: No hike in passenger fares 
• Services PMI rises to one-year high in January 
• Tax collection rises by 12.49% in Apr-January 2012-13 
• December IIP at -0.6% v/s -0.8% (revised) in Nov 2012
• Exports up 0.8%, imports rise 6% in Jan 
• Inflation for January at 6.62% vs 7.18% in December 

Indian Indices

After posting a strong rally in the month of January, the Indian markets lost ground in February and fell over 5%. The month of February gave a real hard time to the Indian markets. The key benchmarks were highly volatile throughout the month based on news action across the globe. The rangebound price action was witnessed after healthy gains for two months. Overall, the February series was quite bad for the market as compared to previous series.

Domestic events like the Railway and the Union Budget 2013-14 disappointed the investors, capping upside for the Indian markets. Certain events like the IIP numbers, monthly inflation figures also kept the markets highly volatile.

Adding further, re-emergence of uncertainties in Europe and the confusion caused in the Union Budget 2013-14 over the applicability of tax relief to foreign investors under the Double Taxation Avoidance Agreement led to a decline of nearly 4.5-4.8% in the benchmark indices in the month of February.

Major Events:
The HSBC services purchasing managers' index (PMI) rose to 54 in January, up from December's 51.7, moving more comfortably into territory above the 50-point threshold that separates accelerating from slowing growth.

India's industrial production fell to an unexpected -0.6% in December from a year earlier weighed down by manufacturing, government data showed on Tuesday (February 12, 2013). 

India's annual consumer price inflation accelerated to 10.79% in January from the previous month, government data showed on Tuesday (February 12, 2013). 

The inflation for January 2013 stood at 6.62% as compared to 7.18% seen in the December month. 

Domestic passenger car sales which declined by 12.45% to 1,73,420 units in January this year compared to 1,98,079 units in the same month of 2012.

India's exports rose by annual 0.8% in January and imports for the month rose 6%, leaving a trade deficit of $20 billion, a senior trade ministry official said on Wednesday (February 13, 2013).

The government pegged FY13 GDP data lowered at 5% versus 6.2% (YoY), a government statement said today, citing provisional estimates. The latest estimate is the worst of all growth projections issued by the government and the RBI.

The Indian markets have been turbulent in February on back of global uncertainty and Budget woes. The Sensex tumbled 5.19% and the Nifty dropped 5.66%

Monthly Trend for the month of February: 

• Indian markets traded lower in the first week ended February 08, 2013, with the Sensex closing the week down by 1.50% and the Nifty down by 1.59%. Profit booking was witnessed throughout the week, which kept the sentiments bearish. Investors booked profits across the board on the back of domestic and global woes. The Sensex shed 91.37 points to close at 19659.82 while the Nifty slipped 30.35 points to end at 5956.90.

• The Indian equities remained unpredictable for the second week (February 15, 2013), the Sensex slipped 0.08% and Nifty was down by 0.27%. Investors booked profits across the board shrugging off positive cues like ease in inflation numbers and declined for the third consecutive week. The global credit rating agency Moody's Investor Service warned that India's expanding current account deficit and external debt will make the country more vulnerable to international financial volatility and have negative implications for its sovereign credit profile. The BSE Sensex declined 16.62 points or 0.08% to settle at 19,468.15 while NSE Nifty dropped 16.10 points or 0.27% to settle at 5,887.40 in the week ended February 15, 2013.

• The key benchmark indices remained highly volatile for the entire week ended (February 22, 2013) the Sensex slipped 0.78% and Nifty was down by 0.63%. There was no respite for the Indian markets this week due to European jitters, depreciation in rupee, gold hitting seven month low and worries that the US Federal Reserve could wind down its bond-buying programme. Equities across the globe witnessed heavy sell-off pressure as the investors moved towards less riskier assets and declined for the fourth straight week. The BSE Sensex declined 151.14 points or 0.78% to settle at 19,317.01 while NSE Nifty dropped 37.10 points or 0.63% to settle at 5,850.30 in the week ended February 22, 2013.

• In the last week of February, as the month ended on February 28, 2013. Disappointment hovered on the D Street and investors could not digest the Finance Minister P Chidambaram's Budget 2013 speech in which he announced the hike in surcharge on corporate tax for domestic companies and dividend distribution tax. Union Budget 2013-14 proved to be a complete non event dragging NSE Nifty below the psychological 5800 mark during the week. The Sensex closed at 18861.54, down by 290.87 points and the Nifty fell by 103.85 points to settle at 5693.05.

Global indices movement for the month:-
All the global indices closed the month on a mixed note. Nikkei was the top gainer for the month rising by 3.78%, followed by Dow Jones which was up by 1.40%, FTSE100 surged 1.34% and Nasdaq gained 0.57%. Top Losers: Hang Seng down by 2.99%, Shanghai Composite slipped by 0.83%, CAC40 down by 0.26% and DAX100 fell by 0.44%.

Sectoral and stock screening for the month:-
Among the 13 sectors, only two sectors closed in the green zone while remaining eleven sectors ended in red. 

Top Gainers: BSE IT rose 5.64% and BSE TECk gained 2.60%.

Top Losers: BSE Metal fell by 14.50%, BSE CG was down by 12.49% while BSE Power fell 10.62%.

Among the 'A' group stocks, top three gainers were - TCS which was up by 12.50%, Hexaware Technologies was up by 12.12% and Container Corporation of India ended the month up by 12.02%. 

Top three losers- CORE Education & Technologies down by 82.00%, Opto Circuits down by 37.66% and Astrazeneca Pharma down by 29.14%.

FII/MF activity:-
The foreign institutional investors (FIIs) bought Indian stocks worth a net of Rs22122.4 crores and the domestic investors sold Indian stocks worth a net of Rs848.1 crores in the month of February.