ShareKhan Newsletter Blog

 Market Commentary 

Bulls outnumber Bears for 4th straight week 

Indian benchmarks marked gains for the fourth straight week led by rally in FMCG stocks and upbeat earnings from IT major TCS. The Sensex shut shop gaining 0.96% while the Nifty rose 0.34% for the week ended July 19, 2013.

Major Headlines for the week:

• June WPI eases to 4.86%, better than estimates
• HDFC Bank Q1 net profit up 30%
• Govt relaxes FDI cap rules; Telecom stock up
• HDFC Q1 consolidated net profit up 34%; stk down
• TCS jumps post Q1 results; beats forecast
• RIL Q1 net profit up 19% (YoY); beats forecast

Indian indices:

Welcome to the 'Weekly Market Wrap' for July 19, 2013. This was the Twenty Ninth trading week of 2013 for the Indian markets which closed with marginal gains owing to liberalisation of foreign direct investment limits in select sectors and first quarter earnings by market movers which boosted sentiment. Indian markets posted fourth consecutive weekly gain on positive global cues and better than expected earnings by companies like Infosys, TCS and HDFC Bank for Q1 June 2013 further supported the uptrend. BSE Sensex gained in four out of five trading sessions in the week. The S&P BSE Mid-Cap index and the S&P BSE Small-Cap index underperformed the Sensex, falling by 0.91% and 0.53% each.

The results announced so far showed that the combined net profit of a total of 103 companies rose 15.7% to Rs11937 crore on 13.7% growth in sales to Rs78869 crore in Q1 June 2013 over Q1 June 2012. 

The S&P BSE Sensex rose 191.38 points to close above 20000 mark at 20,149.85 and the NSE Nifty rose 20.20 points to settle above key 6000 mark at 6029.20.

Major events for the week:

India's inflation data (Wholesale Price Index, or WPI) for June edged up marginally on account of rise in food prices and prices of non-food primary articles to a 4.86% annualised rate (a four-month high) from 4.7% in May. Headline inflation picked up for the first time in five months in June, driven by higher food prices, adding to the economic challenges facing Prime Minister Manmohan Singh's government and reducing the odds of an early national election.

Weekly market trend from July 15, 2013 - July 19, 2013:

• Indian markets ended in green on Monday (July 15, 2013), after country's headline inflation eased for the month of June and remained within the Reserve Bank of India's comfort zone of sub-5%. The BSE Sensex rose 0.38% and the broader Nifty was up by 0.36%. Sentiments improved further after China's slowdown was not as worse as expected. China's second-quarter economic growth cooled. The S&P BSE Sensex wrapped trade at 20034.48, up by 76.01 points while the NSE Nifty rose 21.80 points to settle at 6030.80

• India's benchmarks fell 1% on Tuesday (July 16, 2013), snapping a three-day winning streak, as lenders and other financial firms slumped after the central bank raised short-term interest rates in a bid to curb the rupee's slide. The BSE Sensex fell 0.91% and the Nifty was down by 1.25%. The benchmarks ended lower after the central bank's move to reduce rupee liquidity and an increase in short-term rates dashed hopes of rate cut in the near term thereby raising growth concerns. The Sensex shed 183.25 points to close at 19851.23 while Nifty slipped 75.55 points to end at 5955.25.

• India's relaxation of foreign investment rules lifted markets marginally on Wednesday (July 17, 2013), due to doubts whether long-term inflows would materialise anytime soon. The BSE Sensex rose 0.38% and the broader Nifty was up by 0.36%. The Indian markets rose as the consumer goods shares such as Hindustan Unilever and ITC surged to record highs on growth prospects and their more defensive nature in an uncertain market environment. The S&P BSE Sensex wrapped trade at 19948.73, up by 97.50 points while the NSE Nifty rose 18.05 points to settle at 5973.30.

• India's BSE Sensex rose 0.90% and the broader Nifty was up by 1.08% in trade on Thursday (July 18, 2013), rising for second consecutive session ahead of TCS results. Markets ended higher, amid a range bound trading session, because of short covering in Infosys and buying interest in HDFC Bank after the private bank posted robust June quarter earnings. Capital Goods shares also supported the upmove. Markets ended higher, amid a range bound trading session, because of short covering in Infosys and buying interest in HDFC Bank after the private bank posted robust June quarter earnings. The S&P BSE Sensex wrapped trade at 20128.41, up by 179.68 points while the NSE Nifty rose 64.75 points to settle at 6038.05

• Markets ended flat on Friday (July 19, 2013), after rising to highest intraday level in nearly two months as HDFC fell after its June-quarter earnings missed estimates while blue chips such as Sun Pharma declined on profit-booking. The BSE Sensex rose 0.11% while the broader Nifty was down by 0.15%. The markets kept swinging between gains and losses in the noon session with broader Nifty slipping into negative terrain in noon deals weighed down by profit taking and BSE Sensex ending higher, both the indices remained virtually unchanged as compared to its previous close. The S&P BSE Sensex wrapped trade at 20149.85, up by 21.44 points while the NSE Nifty fell 8.85 points to settle at 6029.20.

Global indices:
All the global markets closed green zone except Shanghai Composite and Nasdaq which fell 2.3% and 0.35% each. Top gainers: CAC40 rose 1.82%, Dax100 rose 1.45%, FTSE100 up by 1.31%, Nikkei up by 0.58%, Dow Jones rose 0.51% and Hang Seng up by 0.4%.

Sectoral and stock screening:
Among the 13 sectoral indices- the topmost gainers were - BSE FMCG which rose 7.10%, BSE Oil&Gas up 4.11% and BSE IT gained 3.98%. The topmost losers were - BSE Bankex which fell 6.23%, BSE Realty down 4.08% and BSE Metal slipped 3.47%.

Looking at the 'A' group stocks, the top three gainers of the week were - HUL up by 14.26%, Godrej Consumer Products rose 13.25% and Infosys up by 12.63%. The top three losers of the week were - Gitanjali Gems fell by 26.40%, MMTC fell by 18.60% and Ashok Leyland fell by 17.57%.

FII/MF activity:
The foreign institutional investors (FIIs) have been the net sellers of the Indian stocks to the tune of Rs604.42 crore and the domestic investors sold Indian shares worth a net of Rs267.1 crore on July 18, 2013.