ShareKhan Newsletter Blog

 Market Commentary 

Markets end with modest gains as rupee recovers 

Indian markets settled with marginal gains and remained in a narrow range throughout the week. The Sensex shut shop gaining 0.54% and Nifty ended flat at 5,471.80 Aug 30, 2013. 

Major Headlines for the week:

• Fiscal deficit target getting more challenging: Fitch
• India's Q1 FY14 GDP disappoints at 4.4% 
• India's fiscal deficit scales 63% of full-year target
• Mphasis Q3 consolidated net profit down 8% (YoY) 

Indian indices:

Welcome to the 'Weekly Market Wrap' for August 30, 2013. After seeing a 5-week continuous fall, Indian market at last closed the week in the green zone. Domestic indices made a nice recovery in the week gone following a rebound in the rupee and fall in crude oil prices. The recovery in the market was due to strong jump in IT and pharmaceutical sector. India's biggest institutional investor Life Insurance Corporation (LIC) was reported to have bought shares during the week.

The S&P BSE Mid-Cap index fell 1.09% and the S&P BSE Small-Cap index fell 1.07%. Both these indices underperformed the Sensex.

In the week ended on August 30, 2013, S&P BSE Sensex rose 100.28 points or 0.54% to 18,619.72 while NSE Nifty ended flat at 5,471.80.

Currency News:
Indian rupee recovered amid high volatility after Prime Minister Dr. Manmohan Singh's speech in the parliament that the government isn't looking at imposing restrictions on the movement of capital out of the country as he sought to allay investor concerns that have lately hurt financial markets, especially the rupee which has declined sharply against the dollar this month. The partially convertible rupee was hovering at 66.10 on August 30, 2013, higher than its close of 66.55/56 on August 29, 2013.

The rupee hit a record low closing of 68.80 a dollar on August 28, 2013 and had risen sharply on August 29, 2013, after the Reserve Bank of India (RBI) on August 28, 2013, said it will sell dollars to oil companies to defend the local currency.

Crude Oil:
US crude oil futures retracted after UK lawmakers rejected a motion for military action against Syria, easing concern that unrest will disrupt Middle East oil supplies. US crude oil futures for October 2013 delivery were down 94 cents a barrel at $107.86 a barrel in the electronic trading on Friday.

Macro Economic front

• India's gross domestic product (GDP) growth dived to a four-year low of 4.4% in the April-June quarter of 2013-14, against 4.8% in the fourth quarter of the previous financial year, official data showed on Friday.

• Amid slowing tax revenues and rising Plan expenditure, the Centre's fiscal deficit for the first four months of this financial year soared to Rs3.4 lakh crore, 62.8% of the Budget estimate (BE) of Rs5.42 lakh crore for 2013-14, according to data released by the Controller General of Accounts.

Weekly market trend from August 26 - August 30, 2013:

On August 26, 2013, Indian markets closed in green zone after witnessing a sharp rise in opening deals, markets extended gain in the morning deals as buying in heavyweights lifted the benchmark indices however, weak Rupee capped the upside. The S&P BSE Sensex wrapped trade at 18558.13, up by 38.69 points while the NSE Nifty rose 4.75 points to settle at 5476.50.

On August 27, 2013, Indices slumped over 3% on Tuesday, giving up nearly all its gains over the previous three sessions, as blue chips plunged on worries the passage of a food security bill would worsen the country's fiscal deficit. The Sensex shed 590.05 points to close at 17968.08 while Nifty slipped 189.05 points to end at 5287.45.

On August 28, 2013, Indian stocks turned positive on Wednesday after falling over 2% led by gains in software services exporters, while banks recovered from earlier falls on value buying. The S&P BSE Sensex wrapped trade at 17996.15, up by 28.07 points while the NSE Nifty fell 2.45 points to settle at 5285.00.

On August 29, 2013, Benchmarks indices ended trading session in the green zone as buying was seen in majority of the sectors and on back of recovery in Rupee. Strong buying activity was seen in majority of the sectors which pushed equities higher. The Sensex closed at 18,401.0, up by 404.89 points, while the Nifty rose by 124.05 points to close at 5,409.05.

On August 30, 2013, Markets made a smart gain, after recovery in rupee and after Prime Minister Dr. Manmohan Singh said in parliament that the government isn't looking at imposing restrictions on the movement of capital out of the country as he sought to allay investor concerns that have lately hurt financial markets, especially the rupee which has declined sharply against the dollar this month. The S&P BSE Sensex wrapped trade at 18619.72, up by 218.68 points while the NSE Nifty rose 62.75 points to settle at 5471.80.

Global indices
All the global markets closed red zone except Shanghai Comp which gained 1.99%. Top most losers: Dax100 fell by 3.73%, CAC 40 which slipped by 3.33% and Nikkei which dropped by 1.99% in this week.

Sectoral and stock screening
Among the 13 sectoral indices. The topmost gainers were - BSE IT which rose 6.40%, BSE TECK up 5.06% and HC gained 3.52%. The topmost losers were - BSE PSU which fell 4.54%, BSE Bankex down 4.51% and Metal slipped 4.08%.

Looking at the 'A' group stocks, the top three gainers of the week were - Multi Commodity Exchange gained 33.96%, Sesa Goa up by 20.49% and National Aluminium Company up by 15.69%. The top three losers of the week were - IDFC fell by 20.49%, Pipavav Defence & Offshore Engineering Company fell by 18.65% and Adani Enterprises fell by 14.37%.

FII/MF activity
The foreign institutional investors (FIIs) have been the net sellers of the Indian stocks to the tune of Rs2904.3 crore and the domestic investors sold Indian shares worth a net of Rs144.70 crore.