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Weekly-market: Weak rupee, global chaos drag markets lower for the week
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Friday, June 21, 2013 |
| | | Market Commentary | | | Weak rupee, global chaos drag markets lower for the week | | The Indian markets wrapped up the week ended June 21, 2013 in the red zone led by weak rupee, FII outflow after Fed meet shattered hopes of future rate cut. The Sensex ended 2.10% lower, while the Nifty fell 2.42% in the week. | |
 Major Headlines for the week:
Indian indices: The Indian markets extended downfall in the 25th trading week of 2013. Key benchmark indices dropped sharply, with investor sentiment hit by a weak rupee and negative news flow across the globe. The results of a private survey indicating slowdown in India's manufacturing activity in May 2013 further aggravated selling.
The Indian indices remained volatile throughout the week, with the Sensex slipping 2.10% and Nifty down by 2.42%. 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. Markets fell in two out of the five trading sessions of the week. The BSE Small-Cap index fell 0.96% and the BSE Mid-Cap index slumped 2.32%. Both these indices outperformed the Sensex.
Selling by FIIs in bonds and equities has sent the rupee tumbling against the dollar. The rupee hit record low 59.9850 against the dollar in intraday deals on June 20, 2013 as global investors pulled out of emerging markets broadly amid concerns over the reduction of a US program that has injected billions of dollars into the global financial system. Investor sentiments were dampened as this would force the Reserve Bank of India to defer easing of key policy rates.
The BSE Sensex declined 403.69 points to settle at 18,774.24 while NSE Nifty dropped 140.75 points to settle at 5,667.65 for the week ended June 21, 2013.
Major events for the Week: -
The Reserve Bank of India released its mid-quarter monetary policy review on June 17, 2013. RBI left repo rate unchanged at 7.25% while the reverse repo rate stands at 6.25% and maintained CRR at 4%. -
Trade deficit in May widened to $20.14 billion from $17.8 billion a month ago, on high imports of cheaper gold, increasing pressure on the current account balance. Weekly market trend from June 17 - June 21, 2013: -
Indian markets recouped early losses on June 17, 2013; shrugging off RBI's neutral stance on key policy rates to end near the day's high, rising by 0.7% led by gains in index heavyweights and M&M. Indian markets witnessed flat trades at start and later swung from days low to end near days high. Indian shares rose for a second straight session on Monday. The S&P BSE Sensex wrapped trade at 19325.87, up by 147.94 points while the NSE Nifty rose 41.65 points to settle at 5850.05. -
On Tuesday (June 18, 2013), the sentiments remained bearish, with investors reacting badly ahead of Fed's policy decision and profit booking. The BSE Sensex slipped 0.53% and the Nifty closed 0.62% lower. The Banks were among the top losers given that an end to US monetary stimulus could push the rupee lower, delaying any rate cuts by the Reserve Bank of India. The Sensex closed at 19223.28, down by 102.59 points and the Nifty fell 36.45 points to settle at 5813.60. -
The BSE Sensex gained 0.12% while NSE Nifty rose 0.15% on Wednesday (June 19, 2013); as markets witnessed a dull session in trade today and shut shop on a flat note keenly waiting for Chairman Ben Bernanke's comments. The Indian markets started on a negative note due to lack of local and Asian cues. Black clouds hovered on the Dalal Street for most part of the day as the equities witnessed gloomy trading session. However, the markets took a breather as frontline Indian equity benchmarks staged a spirited comeback in the mid-afternoon trade led by strong buying across the board. The Sensex ended at 19245.70, up by 22.42 points while Nifty closed at 5822.25, up by 8.65 points. -
The BSE Sensex, NSE Nifty plunge 2.8% on Thursday (June 20, 2013), amid sell off in global markets, weighed down by profit booking in financial shares on worries that the rising rupee would force the RBI to defer easing of key policy rates going forward. Indian markets cracked deeply for the entire day resulting in the biggest single-day percentage fall since February 27, 2012. Bonds, shares and commodities fell sharply around the world on Thursday (June 20, 2013) and the dollar rose after the US Federal Reserve explicitly signaled an end to easy money and data which showed China's economy slowing. The Sensex closed at 18,719.29, down by 526.41 points and the Nifty fell by 166.35 points to settle at 5,655.90. -
On Friday (June 21, 2013), the Indian equities remained highly volatile throughout the day and closed in the green zone. The Sensex inched 0.29% higher and the Nifty rose 0.21%. The Indian markets started the last trading session of the week in the red zone. It was a completely dull session for the Indian equity benchmarks due to lack of local and global cues. The key indices kept oscillating on both sides of the equator. The Indian equity benchmarks continued to struggle for direction for major part of the day. The Sensex and the Nifty virtually remained unchanged from the previous close. The S&P BSE Sensex wrapped trade at  18774.24, up by 54.95 points while the NSE Nifty rose 11.75 points to settle at 5667.65. Global indices:
Majority of the global markets closed the week on a negative note, except Nikkei rose 4.28%. Top Losers: Shanghai Composite plunged 4.11%, Hang Seng declined 3.37% and CAC40 down 2.79%.
 Sectoral and stock screening:
Majority of the sectors closed in red, barring BSE TECK rose by 0.89% and BSE IT up by 0.30%. Top Losers - BSE Realty dipped by 5.72%, BSE Bankex slipped by 4.83% and BSE Metal fell by 4.22%. | | Looking at the 'A' group stocks, the top three gainers of the week were - Jet Airway surged by 12.93%, Reliance Communication
jumped by 12.49% and Indian Hotels gained by 11.30%. The top three losers of the week were - State Trading Corporation of India slipped by 42.47%, Apollo Tyres dipped by 37.77% and MMTC fell by 37.22%.
FII/MF activity:
The foreign institutional investors (FIIs) have been net seller of the Indian stocks worth a net of Rs1124.90 crore, while the domestic investors were net buyers of Indian stocks to the tune of Rs48.80 crore till June 19, 2013.
| | TOP MOVERS (GROUP A) |  | | | | | | | | | | | | Indian Hotels | 51.70 | 11.30 | | | | | | | Apollo Tyres | 57.25 | -37.77 | | | | | | | | | FII/MF ACTIVITIES | | | | | | | Gross purchase | 5,470 | 1,167 | | | | | | | | | | | | Data as on June 19, 2013
| | | | Market Outlook for the coming week!
In the coming week, movement of rupee and trend in investment by foreign institutional investors will dictate trend on the bourses. A weakness in rupee against the dollar has triggered tension for the bourses off late. Expiry of near month F&O contracts may also cause volatility.
The market may remain volatile next week as traders roll over positions in the futures & options (F&O) segment from the near month June 2013 series to July 2013 series. The June 2013 F&O contracts expire on Thursday, 27 June 2013.
A weak rupee will hit companies with high imports and high foreign debt adversely and makes imports costlier. On the other hand, IT companies stand to benefit from the rupee's decline. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
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posted by Anonymous @ 9:38 AM  |
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