ShareKhan Newsletter Blog

 Market Commentary 

Bulls takeover this Week as BJP leads the race 

Benchmarks rose after series of exit polls predicted victory for Bharatiya Janata Party (BJP) in the Assembly elections held in four States. The Sensex shut shop gaining 0.98% while the Nifty rose 1.36% for the week ended December 06, 2013.

Major Headlines for the week:

• HSBC Manufacturing PMI rises to 51.3 in November
• HSBC Services PMI shrinks to 47.2 in November 
• Core sector growth declines in October 
• September FDI declines by 38%

Indian indices:

Welcome to the 'Weekly Market Wrap' for December 07, 2013. The market edged higher last week after a series of exit polls on Wednesday, 4 December 2013, predicted victory for Bharatiya Janata Party (BJP) in the Assembly elections held in four States. Growth in second quarter GDP and the improvement in HSBC India manufacturing index for November also boosted the market. The barometer index, the S&P BSE Sensex, settled a tad below the psychological 21,000 mark, having alternately moved above and below that mark during the week. The Sensex and the 50-unit CNX Nifty, both, hit their highest closing level in almost five weeks.

The market gained in three out of five trading sessions in the week. The BSE Mid-Cap index rose 1% and the BSE Small-Cap index rose 2.07%. Both these indices outperformed the Sensex.

The S&P BSE Sensex rose 204.60 points to 20,996.53. The 50-unit CNX Nifty rose 83.80 points to 6,259.90, its highest closing level since November 03, 2013.

Major events

• After contracting for three months in a row, manufacturing activity saw an uptick in November, latest data from the widely-tracked HSBC Purchasing Managers' Index (PMI) shows. The HSBC Manufacturing PMI, compiled by Markit, rose to 51.3 in November from October's 49.6, the highest since March and its first time above the watershed level of 50 that divides growth from contraction in four months.

• India's services sector, which constitutes the biggest chunk of its economy, shrank for the fifth month in a row in November, according to the widely-tracked HSBC purchasing managers' index released today. Services PMI inched up to 47.2 points in November from 47.1 in October, remaining in the negative zone. PMI above 50 means expansion and below that number it is a decline.

Weekly market trend from December 02, 2013 - December 06, 2013

• Indian shares rose on Monday (December 02, 2013), to mark their highest close in nearly a month as shares gained after promising manufacturing data at home and in China eased concerns about slowing economies. The BSE Sensex rose 0.51% and the Nifty was up by 0.68%. Benchmark closed on strong note as better-than-expected HSBC Manufacturing PMI alongwith second quarter GDP numbers released late Friday boosted the sentiment. The Sensex closed at 20,898.01, up by 106.08 points, while the Nifty rose by 41.75 points to close at 6,217.85.

• Indian shares fell on Tuesday (December 03, 2013), to snap a three-day winning streak due to profit-taking in stocks of blue chips such as Larsen and Toubro Ltd after upbeat U.S. data raised fears the Federal Reserve would reduce its monetary stimulus. The BSE Sensex slipped 0.21% and the Nifty was down by 0.26%. Benchmarks witnessed a listless trade and ended with marginal losses as investors booked profits at higher levels after gains in the previous three sessions. The S&P BSE Sensex shed 43.09 points to close at 20854.92 while Nifty slipped 16.00 points to end at 6201.85.

• Indian shares fell on Wednesday (December 04, 2013), to mark their second consecutive day of losses as investors locked in profits in blue chip shares such as ICICI Bank ahead of major risk events including U.S. jobs data and state elections results due later in the week. The BSE Sensex slipped 0.70% and the Nifty was down by 0.66%. Benchmarks ended lower for the second straight day, amid weak Asian cues, as investors booked profits in late trades ahead of the assembly election results due on Sunday. The S&P BSE Sensex shed 146.21 points to close at 20708.71 while Nifty slipped 40.90 points to end at 6160.95.

• On Thursday (December 04, 2013), the Indian shares marked their highest close in a month, as stocks of blue chips, including lenders surged after exit polls predicted a strong showing for the key opposition party in state elections held recently. The BSE Sensex rose 1.20% and the Nifty was up by 1.30%. Benchmark closed on strong note as hope rally pushed frontline stocks to higher levels. Indices were euphoric as exit polls conducted in the assembly elections indicated that BJP could win 3 out of 5 states which are set to declare poll results on December 8. The Sensex closed at 20,957.81, up by 249.10 points, while the Nifty rose by 80.15 points to close at 6,241.10

• On Friday (December 04, 2013), the Indian equities remained highly volatile throughout the day and closed today's trading session in the green zone. The Sensex rose 0.18% while the Nifty shut shop 0.30% higher. However the markets gained momentum in the afternoon trades led by buying activity. Positive opening of the European indices also helped the markets to close last trading day of the week in green. The Sensex closed at 20996.53, up by 38.72 points and the Nifty rose 18.80 points to settle at 6259.90.

Global indices:
Majority of the global markets closed on a negative note except Shanghai Comp which gained by 0.75% and Nasdaq rose 0.06%. Top Losers: CAC 40 dropped by 3.86%, Dax100 fell by 2.48% and Nikkei lost 2.31%.

Sectoral and stock screening:
Majority of Sectors ended in green, barring S&P BSE FMCG down by 2.74% and S&P BSE Auto down by 0.20%. The topmost gainers are - S&P BSE Bankex rose by 4.98%, S&P BSE CG up by 4.71% and S&P BSE Power advanced by 4.56%. .

Looking at the 'A' group stocks, the top three gainers of the week were - OBC up by 17.68%, Adani Power rose 17.15% and NMDC up by 14.76%. The top three losers of the week were - Strides Arcolab fell by 10.67%, Godrej Consumer Products slipped by 7.77% and Wockhardt dipped by 5.47%.

FII/MF activity
The foreign institutional investors (FIIs) have been the net buyers of the Indian stocks to the tune of Rs2781.80 crore as on December 05, 2013 and the domestic investors sold Indian shares worth a net of Rs356.20 crore as on December 04, 2013.