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Weekly-market: Fed tapering, Rate hike weigh on local bourses; Indices down 3%
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Saturday, February 1, 2014 |
| | | Market Commentary | | | Fed tapering, Rate hike weigh on local bourses; Indices down 3% | | The last week of January 2014 remains lackluster yet again as benchmarks trimmed gains collected in the week earlier led by subdued domestic and global cues. The Sensex shut shop 2.93% lower while the Nifty fell 2.83% for the week ended January 31, 2014. | |
 Major Headlines for the week:
Indian indices: Welcome to the 'Weekly Market Wrap' for January 31, 2014 where market slumped after the Reserve Bank of India (RBI) unexpectedly hiked policy rates on Tuesday, 28 January 2014, to counter inflation. The market fell in four out of five trading sessions.
After a monetary policy review, the Federal Open Market Committee (FOMC) on January 29, 2014 announced that it will reduce monthly bond purchases by another $10 billion to $65 billion. The Fed also signaled that it is likely to keep reducing bond purchases in the coming months, citing a pickup in US economic activity and improvement in the US labor market. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets in recent years.
The BSE Mid-Cap index fell 147.21 points, or 2.28% to 6,308.05 and the BSE Small-Cap index fell 181.11 points, or 2.81% to 6,263.35. Both these indices outperformed the Sensex.
The S&P BSE Sensex fell 619.71 points to 20,513.85. The 50-unit CNX Nifty fell 177.25 points to 6,089.50.
Major events for the week: -
The central bank unexpectedly raised repo rate by 25 bps to 8% in its third quarter monetary policy review. The reverse repo rate under the Liquidity Adjustment Facility (LAF) stood adjusted at 7%, and the marginal standing facility (MSF) rate and the bank rate at 9%. The Cash Reserve Ratio (CRR) was kept unchanged at 4% of Net Demand and Time Liabilities (NDTL). -
The key financial data released on Friday, post market hours today showed that fiscal deficit numbers, for April-December, 2013, touched 95.2% of the budgeted target for the whole year, suggesting that capping the fiscal to 4.8% of GDP would be an uphill task.
The fiscal deficit touched Rs5.16 trillion during April-December, or 95.2% of the full year target, compared with 78.8% a year ago, government data showed on Friday. Net tax receipts were at Rs5.18 trillion in the first nine months of the current fiscal year to March 2014, while total expenditure was Rs11.64 trillion. Weekly market trend from January 27, 2014 - January 31, 2014: -
Jan 27- India's NSE index slumped 2% on Monday, marking its biggest daily fall since Sept. 3 as a rout in emerging markets hit blue chips, while lenders were hit further by caution ahead of the central bank's policy review. Emerging markets witnessed a sell-off amid worries that the US Federal Reserve would continue trimming its monetary stimulus measures while worries over liquidity crunch in China, the world's second largest economy also weighed on investor sentiment. The Sensex closed at 20707.45, down by 426.11 points, while the Nifty fell 130.90 points to close at 6135.85 -
Jan 28- Indian shares fell for a third consecutive session after earlier hitting their lowest intraday level in two months, as lenders such as Axis Bank were hit when the central bank unexpectedly raised interest rates. The BSE Sensex fell 0.12% and NSE Nifty was down by 0.16%. Benchmark share indices ended flat, amid a volatile trading session, shrugging of the surprise move by the central bank. The Sensex closed at 20683.51, down by 23.94 points, while the Nifty fell 9.60 points to close at 6126.25 -
Jan 29- India's NSE index fell for a fourth consecutive session on Wednesday to its lowest close in two months as banks were hit after India's biggest private lender, ICICI Bank, said bad loans rose in the December-quarter. The BSE Sensex fell 0.18% and NSE Nifty was down by 0.10%. The Sensex closed at 20647.30, down by 36.21 points, while the Nifty fell 6.00 points to close at 6120.25. -
Jan 30- Benchmark index fell for a fifth session on Thursday to mark its lowest in 10 weeks as blue chips slumped with the U.S. Federal Reserve continuing to scale back stimulus despite the turmoil in emerging markets. The BSE Sensex fell 0.72% and NSE Nifty was down by 0.76%. Benchmark share indices ended in red again, amid weak global cues, after the US Fed further trimmed its monetary stimulus measures and concerns over emerging market currencies weighed on investor sentiment. The Sensex closed at 20498.25, down by 149.05 points, while the Nifty fell 46.55 points to close at 6073.70. -
Jan 31- Indian shares rose on Friday to snap their five-day losing streak, edging higher from 10-week lows hit in the previous session, as investors chose to pick up blue chips such as ICICI Bank on value buying. The BSE Sensex rose 0.08% and NSE Nifty was up by 0.26%. Benchmark share indices ended a lackluster session marginally higher after slipping to month-lows on Thursday after US Federal Reserve stepped on the gas to taper its  monthly-bond buying program. The Sensex closed at 20513.85, up by 15.60 points, while the Nifty rose 15.80 points to close at 6089.50. Global indices:
All the global markets closed in the red zone except CAC40 which rose 0.10% in the week gone. Topmost losers- Nikkei slipped 3.10%, FTSE100 declined 2.30%, Hang Seng fell by 1.85% and Dow Jones down by 1.14%.
 Sectoral and stock screening:
All the 13 sectoral indices ended in red: Top losers - S&P BSE Realty slipped by 7.31% followed by S&P BSE Bankex which fell 6.72% and S&P BSE Metal down 4.71%. | | Looking at the 'A' group stocks, the top three gainers of the week were - Aurobindo Pharma up by 10.63%, Glenmark Pharma rose 9.95% and Ipca Laboratories up by 9.25%. The top three losers of the week were - Ranbaxy Labs fell by 22.47%, Pipavav Defence and Offshore slipped by 20.71% and Bank of India dipped by 20.41%.
FII/MF activity
The foreign institutional investors (FIIs) have been the net sellers of the Indian stocks to the tune of Rs2563.00 crore and the domestic investors sold Indian shares worth a net of Rs408.40 crore as on January 30, 2014 respectively. | | TOP MOVERS (GROUP A) |  | | | | | | | | Aurobindo Pharma | 471.40 | 10.63 | | | Glenmark Pharma | 558.95 | 9.95 | | | | | | | Ranbaxy Labs | 323.40 | -22.47 | | | Pipavav Defence | 33.70 | -20.71 | | | | | | | | | FII/MF ACTIVITIES | | | | | | | Gross purchase | 12,747.3 | 2,416.9 | | | Gross sale | 15,310.3 | 2,825.3 | | | Net investment | -2,563.0 | -408.4 | | | | | | | | Data as on January 30, 2014
| | | | Market Outlook for the coming week!
In the coming week, the next batch of Q3 December 2013 results, trend in investment by foreign institutional investors, trend in global markets, trend in other global emerging markets and the movement of rupee against the dollar will dictate the near term movement on the domestic bourses.
Telecom stocks will be in focus as the government has put up for sale 403 units of airwaves in 1800 Mhz band and 46 units in the 900 Mhz band for spectrum auction scheduled on Monday, February 03, 2014.
Auto stocks will be in focus as companies from this sector start reporting sales volumes data for the month of January 2014 starting from Saturday, February 01, 2014.
Markit Economics will unveil HSBC India Manufacturing PMI, which gauges the business activity of India's factories for January 2014 on Monday, February 03, 2014.
Markit Economics will unveil the result of a monthly survey on the performance of India's services sector for January 2014 on Wednesday, February 05, 2014.
On the global markets front, Asian markets will on Monday, February 03, 2014; react to China's official manufacturing-sector report for January which will be out over the weekend.
Stock markets in mainland China remain closed until February 07, 2014 for the Lunar New Year holiday, while Hong Kong market is shut until February 04, 2014. The week-long Chinese Lunar New Year holiday began on 31 January 2014 and is a period in which cash gifts are made and families get together for celebratory feasts.
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posted by Anonymous @ 4:15 AM  |
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