ShareKhan Newsletter Blog

 Market Commentary 

Global woes, Weak rupee weaken markets; BSE, NSE fall over 1%

Domestic and global woes weighed on the market sentiments this week. The Sensex fell 1.29% and the Nifty dropped 1.23% for the week ended June 14, 2013. 

Major Headlines for the week:

• Car sales fall 12.3% in May 
• May CPI at 9.31%; above estimates 
• Fitch revises India's Outlook to Stable 
• IIP for April revised again to 2.3%
• May 2013 WPI Inflation at 4.7%

Indian indices:

The Indian indices remained volatile throughout the week, with the Sensex slipping 1.29% and Nifty down by 1.23%. 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. Indian markets also witnessed a sharp fall due to continuous fall in rupee against the dollar, which hit record low. However, on Friday the rupee recovered from an all time low, thus halting the downward slide in equity market.

The S&P BSE Mid-Cap index fell 3.24% while the S&P BSE Small-Cap index fell 3.18%. Both these indices underperformed the Sensex. The S&P BSE Sensex, managed to settle above 19,000 mark and NSE Nifty at 5,800 level after alternately moving above and below that mark during the weak. This was the 24th trading week of 2013.

The BSE Sensex declined 1.29% to settle at 19,177.93 while NSE Nifty dropped 1.23% to settle at 5808.40 in the week ended March 22, 2013.

Events:

• Industrial production growth for April 2013 has been revised upwards to 2.3% from 2% reported on Wednesday, (June 12, 2013), as the government corrected production data for electricity.

• Inflation based on the wholesale price index (WPI) eased further to 4.7% in May 2013 from 4.89% in April 2013.

• Global credit rating agency, Fitch Ratings on Wednesday raised its outlook on India's sovereign debt to stable from negative. Fitch cited the government's steps to contain its budget deficit despite the economic slowdown as the main reason for raising the outlook.

Weekly market trend from June 10 - June 14, 2013:

• Markets closed little changed on Monday (June 10, 2013); as a fall in the rupee to a record low hit lenders by raising fears the central bank would hold off cutting interest rates, while IT companies rose on hopes of improving returns from overseas markets. Sensex rose 0.06% while the Nifty shut shop 0.05% lower. The NSE Nifty closed little shy of key resistance level of 5880 on back of selling in rate-sensitive sectors such as CD, Realty, Bankex, HC and Metal stocks. The S&P BSE Sensex wrapped trade at 19441.07, up by 11.84 points while the NSE Nifty fell 3.00 points to settle at 5878.00.

• On Tuesday (June 11, 2013); the Indian markets continued its downtrend and closed the session near day's low led by continuous fall in Rupee. The BSE Sensex fell 1.53% and the broader Nifty was down by 1.52%. India's 50-stock benchmark index fell by 1.5% to test its 200 day moving average for the first time since April 16, after the rupee falls to a new record low of 58.98 to the U.S. dollar. The Sensex shed 298.07 points to close at 19143 while Nifty slipped 89.20 points to end at 5788.80.

• Indian stock markets closed the session near day's low on Wednesday (June 12, 2013); led by less than expected IIP data. The BSE Sensex fell 1.53% and the broader Nifty was down by 1.52%. India's benchmark index fell for a second successive session to its lowest close since April 18 as lenders such as Axis Bank extended recent losses after high retail inflation in May was seen shutting the door on a rate cut next week. The Sensex shed 101.87 points to close at 19041.13 while Nifty slipped 28.60 points to end at 5760.20.

• Markets continued to fall for a third consecutive session to close at their lowest since April 17 on Thursday (June 13, 2013). The BSE Sensex fell 1.12% and the broader Nifty was down by 1.06%. The markets carried previous sessions' losses amid raising growth concerns and lack of faith shown by FIIs and DIIs in the Indian economy. The rupee also remained weak, trading below 58 versus the dollar, as Finance Minister P. Chidambaram did not announce any concrete steps to arrest its fall. The Sensex shed 213.97 points to close at 18827.16 while Nifty slipped 61.10 points to end at 5699.10.

• Indian shares snapped three-day losing streak to end 2% higher on Friday (June 14, 2013), amid firm global cues, as lower-than-expected May WPI ignited hopes of a policy rate cut by the central bank at its policy meet on Monday. Markets gained after losing for six trading sessions on Friday, heading towards its biggest single-day rise since May 15, as headline inflation eased ahead of the RBI review on Monday, while Asian shares rebounded on upbeat U.S. data. The S&P BSE Sensex wrapped trade at 19177.93, up by 350.77 points while the NSE Nifty rose 109.30 points to settle at 5808.40.

Global Indices:
All the global markets closed the week on a negative note. Top Losers: Hang Seng slipped 2.81%, Shanghai Composite fell 2.21%, CAC40 plunged 1.74%, FTSE100 declined 1.62%, DAX100 fell 1.54% and Nasdaq fell 1.32%.

Sectoral and stock screening:
Majority of the sectors closed in red, except BSE CG up by 23.23%. Top Losers - BSE CD slipped by 31.88%, BSE Metal dipped by 7.78% and BSE Realty fell by 7.48%.

Looking at the 'A' group stocks, the top three gainers of the week were - Ipca Laboratories surged by 7.45%, Thermax jumped by 5.48% and Satyam Computer gained by 5.14%. The top three losers of the week were - Apollo Tyres slipped by 30.56%, MMTC dipped by 22.69% and Sun TV Network fell by 20.23%.

FII/MF activity 
The foreign institutional investors (FIIs) have been net seller of the Indian stocks worth a net of Rs2210.10 crore, while the domestic investors were net sellers of Indian stocks to the tune of Rs398.90 crore till June 13, 2013.