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 Market Commentary 

Markets lose grip for 5th week; Rupee remains concern 

Indian benchmarks wrapped up the week ended August 23, 2013, in the red zone for fifth straight week owing to Rupee volatility and growth concerns. The Sensex ended 0.42% lower, while the Nifty fell 0.66% in the week. 

Major Headlines for the week:

• Forex reserves rise by $1.43 bn 
• Moody's downgrades BoB, Union Bank, PNB and Canara Bank 
• BSE Metal index top gainer on sectoral pack 
• HSBC downgrades Indian shares from 'Overweight' 

Indian indices:

Welcome to the 'Weekly Market Wrap' for August 23, 2013. The Indian stock indices continued with its downtrend in the 34th trading week of 2013. The market fell in three out of five trading sessions. Back home, weak rupee also played spoilsport after hitting record low of 65.06 on Thursday, August 22, 2013. The S&P BSE Mid-Cap index fell 1.48%, underperforming the Sensex. The S&P BSE Small-Cap index declined 0.42%, matching fall of the Sensex.

Key benchmark indices cut sharp weekly losses triggered by rupee plunging to a record low against the dollar. Globally, rising expectations that the US Federal Reserve will soon start withdrawing its monetary stimulus to the US economy also triggered fall in domestic bourses. However, market recovered on bargain hunting and comments from Finance Minister P. Chidambaram and Reserve Bank of India Governor D. Subbarao that India doesn't plan to introduce capital controls. The barometer index, the S&P BSE Sensex, regained the psychological 18,000 level after sliding below that level during the week.

The S&P BSE Sensex fell 78.74 points to 18,519.44. Nifty fell 36.10 points to 5,471.75.

Major events of the week:
India's benchmark 10-year bond yields marked their biggest gain in at least 15 years, while the rupee remained under pressure after the Reserve Bank of India (RBI) said it will buy bonds to ease a cash crunch, and relaxed bond holding rules for lenders.

Indian rupee fell past 65 to the dollar to a record low of 65.56 against the dollar on Thursday, after Federal Reserve minutes hinted that the U.S. was on course to begin tapering stimulus as early as next month and as foreign investors become sellers of Indian stocks. The rupee today traded at 64.98, down by 86 paise against the dollar at the Interbank Foreign Exchange market.

Weekly market trend from August 19 - August 23, 2013:

• Indian equities cracked more than 2% on Monday (August 19, 2013); led by sharp fall in rupee, selling pressure in blue chips companies amid weak global cues. The benchmarks maintained southward journey for the entire day and ended the trading on a negative note led by weak Asian cues and downfall in Indian currency. Selling pressure by institutional investors was led by the rupee which touched all-time low against the dollar raising worries of a widening current account deficit and higher inflation. The Sensex shed 290.66 points to close at 18307.52 while Nifty slipped 93.10 points to end at 5414.75.

• India's benchmarks ended in red for the third day on Tuesday (August 20, 2013); owing to global chaos and jittery rupee against the dollar that raised worries over higher current account deficit. The BSE Sensex fell 0.34% and the Nifty was down by 0.25%. Indian shares ended off lows after falling nearly 2% in the morning due to a record low rupee, as expectations of the withdrawal of U.S. stimulus were seen as overdone. Markets booked third consecutive day of declines. The Sensex shed 61.48 points to close at 18246.04 while Nifty slipped 13.30 points to end at 5401.45

• Benchmarks cracked deeply on Wednesday (August 21, 2013); as blue chip stocks slumped on fears of FII selling after the rupee hit new lows ahead of a U.S. Fed meet that may give details of its stimulus policy. The BSE Sensex fell 1.86% and the Nifty was down by 1.83%. Benchmark indices extended losses for fourth consecutive trading session amid weak global cues, along with metal, FMCG and IT shares leading the sharp decline. The Sensex shed 340.13 points to close at 17905.91 while Nifty slipped 98.90 points to end at 5302.55

• On Thursday (August 22, 2013); the Benchmark indices rose over 2% on Thursday, snapping a four-day losing streak, as metal stocks rallied on China's improved manufacturing data, while blue chips rose on value buying. Markets edged higher in the afternoon session tracking firm opening in the European shares. Markets closed on a day's high with the benchmark indices gaining over 2% each as Rupee recovered from an all time low. The S&P BSE Sensex wrapped trade at 18312.94, up by 407.03 points while the NSE Nifty rose 105.90 points to settle at 5408.45

• Markets ended in the green zone on Friday (August 23, 2013); as buying was seen in majority of the sectors and on back of recovery in Rupee. The Sensex rose 1.13% while the Nifty added 1.17%. Strong buying activity was seen in majority of the sectors which pushed equities higher. Benchmark indices extended the gains in late noon trades as rupee recovered after six straight days of losses. Key benchmark indices continued to gain for 2nd-day on the last trading session of week, amid renewed buying interest in index heavyweights The Sensex closed at 18,519.44, up by 206.50 points, while the Nifty rose by 63.30 points to close at 5,471.75.

Global indices:
All the global markets closed the week on a mixed note. Top gainers: Nasdaq up 1%, Nikkei rose 0.08% and DAX 100 rose 0.07%. Top Losers: Hang Seng slipped 2.91%, CAC40 fell 1.57% and Dow Jones fell 0.78%.

Sectoral and stock screening: 
Among the 13 sectoral indices, eight sectors closed in the red zone while remaining five sectors closed in the green zone. Top Gainers- BSE Metal up by 12.41%, BSE IT rose by 1.35%, BSE PSU surged by 1.11%. Top Losers: BSE HC slipped 3.60%, BSE Auto fell 3.49% and BSE Realty declined 3.18%.

Looking at the 'A' group stocks, the top three gainers of the week were - JP Power surged by 22.40%, Tata Steel up 17.04% and Hindalco Industries gained by 13.29%. The top three losers of the week were - Future Retail slipped by 25.97%, Financial Technologies dipped by 20.80% and Bank of India fell by 17.90%.  

FII activity 
The foreign institutional investors (FIIs) have been the net sellers of the Indian stocks to the tune of Rs2767 crore on August 21, 2013 and the domestic investors bought Indian shares worth a net of Rs497.6 crore on August 20, 2013.