ShareKhan Newsletter Blog

 Market Commentary 

Markets fall after rising for three weeks 

In the second trading week of March 2014, indices reversed the rising trend after recording all time intraday highs during the week on subdued global scenario. The Sensex shut shop 0.50% lower while the Nifty fell 0.34% for the week ended March 14, 2014

Major Headlines for the week:

• Domestic car sales rise 1.4% in February 
• Feb trade deficit narrows to $8.13 bn 
• February WPI eases at 4.68% Vs 5.05% (MoM) 
• IIP better than expectation, CPI moderates, in line with estimates
• Infosys opens gap down on gloomy Q4 expectations

Indian indices:

Welcome to the 'Weekly Market Wrap' for March 14, 2014 where key benchmark indices declined last week on weak global cues. Media reports that unseasonal heavy rain and hail storms have hit crops across the country over the last one week hit investor sentiment adversely. Provisional data showing a decline of 3.67% in India's merchandise exports year-on-year in February 2014 also spoiled sentiment.

The BSE Mid-Cap index fell 37.26 points, or 0.56% to 6,656.18, underperforming the Sensex. The BSE Small-Cap index rose 15.23 points, or 0.23% to 6,627.68, outperforming the Sensex.

The S&P BSE Sensex fell 109.99 points to 21,809.80. The 50-unit CNX Nifty fell 22.45 points to 6,504.20

Major events for the week: 

• Trade deficit for February narrowed to $8.13 billion compared to $9.92 billion recorded in January. It was $14.12 bn in the same period last year. Exports stood at $25.68 bn compared to $26.35 bn in January. They were down 3.7% on a y-o-y basis.

• Consumer Price Index (CPI) fell to a 25-month low in February and is likely to increase the clamour for the Reserve Bank of India (RBI) to cut interest rates in its next monetary policy. The combined (rural + urban) CPI inflation moderated further to 8.1% during February 2014 as compared to 8.8% in January 2014.

• India's wholesale prices-based monthly inflation eased to a nine-month low of 4.68% in February as food and fuel prices moderated, raising expectations that the RBI would leave interest rates unchanged at its policy review next month.

• In January 2014 the IIP grew by 0.1% versus market estimates of -0.9%. The January IIP is at its highest in the past four months and is attributed to some lesser decline the consumer goods (-0.6% vs -4.7% in December 2013) and manufacturing segments (-0.7% vs -1.2% in December 2013). The December IIP numbers have been revised marginally upwards to -0.2% from -0.6%.

Weekly market trend from March 10, 2014 - March 14, 2014:

March 10= Indian markets ended flat with positive bias amid range bound trade on Monday led by bank and capital goods shares. The BSE index rose 0.07%, after hitting an all-time intraday high at 22,023.98 while NSE index ended up 0.16% after also marking a record high of 6,562.20, its second consecutive all-time high. The Sensex closed at 21934.83, up by 15.04 points, while the Nifty rose by 10.60 points to close at 6537.25.

March 11- Key Indices slipped on Tuesday as investors booked profits after a 5-day rally which pushed the Sensex above 22,000 marks in intra-day trades on Monday. The BSE Sensex fell 0.49% and the Nifty was down by 0.39%. The Sensex closed at 21826.42, down by 108.41 points, while the Nifty fell 25.35 points to close at 6511.90.

March 12- Indian shares edged higher on Wednesday, provisionally posting their sixth gain in seven sessions as drug makers and software services exporters such as Tata Consultancy Services recovered from recent steep losses. The BSE Sensex rose 0.14% and NSE Nifty was up by 0.08%. Benchmarks came off their day's highs to end flat amid a range bound trading session on Wednesday as investors turned cautious ahead of industrial production for January and consumer price inflation data for February. The Sensex closed at 21856.22, up by 29.80 points, while the Nifty rose 5.00 points to close at 6516.90.

March 13- Indian shares fell on Thursday as Infosys slumped after its chairman said revenue could grow at the lower end of guidance for this fiscal year, while Sun Pharmaceutical Industries slumped after a U.S. ban on some of the drug maker's imports. The BSE Sensex and NSE Nifty were down by 0.37% each. The Sensex closed at 21774.61, down by 81.61 points, while the Nifty fell 23.80 points to close at 6493.10.

March 14- Markets edged higher in late trades led by buying index heavyweights and short covering in financial shares. The BSE Sensex rose 0.16% and NSE Nifty was up by 0.17%. Markets staged smart recovery in late afternoon session after a range-bound day of trades this Friday ignoring weak global cues. The Sensex closed at 21,810, up 35 points while the Nifty gained 11 points to close above the psychological 6,500 levels at 6,504.

Global indices:
All the global markets closed the week on a negative note. Top Losers: Nikkei slipped 6.20%, Hang Seng down 4.95% CAC 40 fell 3.44% and DAX 100 fell 3.15%.

Sectoral and stock screening:
Among the 13 sectoral indices, seven sectors closed in the green zone while remaining sectors closed in the red zone. Top Gainers- S&P BSE Realty up by 2.07%, S&P BSE Oil & Gas rose by 1.50%, S&P BSE FMCG surged by 1.29%. Top Losers: S&P BSE IT slipped 6.09%, S&P BSE Teck fell 5.20% and S&P BSE Metal declined 4.82%.

Looking at the 'A' group stocks, the top three gainers of the week - Engineers India surged 10.07%, GMDC jumped 8.57% and MMTC gained 7.79%. Top three losers of the week -Financial Tech slipped 10.37%, Infosys dipped 7.71% and L&TFH fell 7.70%.

FII/MF activity
The foreign institutional investors (FIIs) have been the net sellers of the Indian stocks to the tune of Rs679.60 crore as on March 13, 2014 and the domestic investors sold Indian shares worth a net of Rs596.10 crore as on March 12, 2014.