Indian Market Posts Marginal Weekly Loss
DSIJ Intelligence / 24 Mar 2012
Although market took a huge beating on Thursday, they recovered some of their losses on Friday, thus leading the index to fall marginally in the negative territory for the week ended March 23. It seems that the markets are still trying to find a clear direction after the budget and its implications.
The announcement of the Union Budget had a muted impact on the broader indices. Although the indices had taken a huge beating on Thursday, they recovered some of their losses today, thus leading the index to fall marginally in the negative territory for the week ended March 23. It seems that the markets are still trying to find a clear direction after the budget and its implications.
| Benchmark Indices | |||
|---|---|---|---|
| Index | 16-Mar-12 | 23-Mar-12 | % Change |
| SENSEX | 17466.20 | 17361.74 | -0.60 |
| NIFTY | 5317.90 | 5278.20 | -0.75 |
| Hang Seng | 21317.85 | 20668.80 | -3.04 |
| Nikkei | 10129.83 | 10011.47 | -1.17 |
| Shanghai | 2404.74 | 2349.54 | -2.30 |
| Dow Jones* | 13232.62 | 13046.14 | -1.41 |
| S&P 500* | 1404.17 | 1392.78 | -0.81 |
| NASDAQ* | 3055.26 | 3063.32 | 0.26 |
| Bovespa* | 67684.13 | 65828.20 | -2.74 |
| FTSE* | 5965.58 | 5845.65 | -2.01 |
| DAX* | 7157.82 | 6981.26 | -2.47 |
| CAC* | 3594.83 | 3472.46 | -3.40 |
| * closing till Thursday | |||
The budget had several factors that have led the markets to remain uncertain. The Consumer Price Index (CPI) for the month of February 2012 was at 8.83 per cent. This further indicates that with inflation being on the higher side, the RBI may maintain status quo in its next monetary meet which is scheduled for April 17, 2012. The government also rolled back some of the fare hikes which were announced earlier in the Railway Budget. The draft of the CAG which announced a loss of Rs 10.67 lakh crore on account of coal block allocation impacted the market sentiments negatively.
| Institutional Turnover | ||
|---|---|---|
| Date | FII | DII |
| 16-Mar-12 | 884 | -770 |
| 19-Mar-12 | 161 | -296 |
| 20-Mar-12 | 111 | -120 |
| 21-Mar-12 | 623 | -294 |
| 22-Mar-12 | 247 | -133 |
| Total | 2026 | -1613 |
Further, the government clarified that the draft is in a preliminary stage and therefore is misleading. Meanwhile, the verdict by the Supreme Court in favour of Vodafone will result in the Income Tax Department having to cough up a refund of Rs 2,500 crore to the company with an interest rate of 4 per cent. This was because the finance minister amended the tax on overseas’ transactions with retrospective effect from 1962. It seems then that the government is in a very confused state of mind and is further dampening the investors’ sentiments towards the market.
| Volumes (Rs.cr) | ||
|---|---|---|
| Date | BSE | NSE |
| 16-Mar-12 | 3581 | 16434 |
| 19-Mar-12 | 2401 | 11002 |
| 20-Mar-12 | 2627 | 11555 |
| 21-Mar-12 | 2401 | 13199 |
| 22-Mar-12 | 2985 | 14112 |
| 23-Mar-12 | 2372 | 11445 |
On the global front, most of the markets ended the week on a weak note with the exception of Nasdaq which closed marginally in the green. Shanghai closed the week by slipping down more than 2 per cent on concerns that the Chinese economy is slowing and that this would have an impact on the global growth prospects. The European markets too ended the week by sliding down by more than 2 per cent on the back of the manufacturing and service output being more than expected in March. The global markets also reacted negatively after the dismal US housing numbers.
| Key Global Indicators | |||
|---|---|---|---|
| Index | 16-Mar-12 | 23-Mar-12 | % Change |
| Gold | 27,884 | 27,951 | 0.24 |
| Silver | 57,150 | 56,481 | -1.17 |
| Crude Oil (Brent) | 126.27 | 124.07 | -1.74 |
| Crude Oil (Nymex) | 107.28 | 105.90 | -1.29 |
Meanwhile, crude oil showed some relief as it ended the week by coming down by almost 2 per cent. The various concerns over this commodity continue to exist and there remains uncertainty about where the crude oil prices will head next. Gold displayed a much muted performance during the week as it closed marginally on the higher side. It seems that currency volatility has reared its head again and may spread a dark cloud over the economy. The week ended with the rupee depreciating by 2.29 per cent against the dollar. The rupee also depreciated as against some other global currencies.
| Currency Rate | |||
|---|---|---|---|
| Index | 16-Mar-12 | 23-Mar-12 | % Change |
| USD | 50.03 | 51.17 | 2.29 |
| EURO | 65.81 | 67.80 | 3.03 |
| GBP | 79.17 | 81.18 | 2.54 |
| JYP (per 100) | 60.15 | 61.91 | 2.93 |
Back home, among the sectoral indices, metals and power were the major sectors closing on the lower side. The defensive bets proved again to be the right picks during these times of volatility with indices like FMCG and healthcare ending the week with an increase of 2.71 and 1.77 per cent respectively.
| Sectoral Indices | |||
|---|---|---|---|
| Category/Index | 16-Mar-12 | 23-Mar-12 | Change (%) |
| Broad | |||
| MIDCAP | 6,361.59 | 6,350.92 | -0.17 |
| SMLCAP | 6,704.46 | 6,626.35 | -1.17 |
| BSE-100 | 9,197.46 | 9,135.50 | -0.67 |
| BSE-200 | 2,163.11 | 2,151.07 | -0.56 |
| BSE-500 | 6,775.79 | 6,737.92 | -0.56 |
| Sectors | |||
| METAL | 11,515.35 | 11,223.41 | -2.54 |
| POWER | 2,191.42 | 2,136.59 | -2.50 |
| OIL&GAS | 8,240.78 | 8,059.08 | -2.20 |
| AUTO | 10,154.48 | 9,998.62 | -1.53 |
| PSU | 7,481.78 | 7,382.88 | -1.32 |
| CG | 10,246.18 | 10,111.75 | -1.31 |
| BANKEX | 11,969.50 | 11,860.42 | -0.91 |
| REALTY | 1,798.33 | 1,790.51 | -0.43 |
| CD | 6,486.73 | 6,469.15 | -0.27 |
| IT | 6,069.03 | 6,095.08 | 0.43 |
| TECk | 3,546.61 | 3,569.10 | 0.63 |
| HC | 6,354.34 | 6,466.76 | 1.77 |
| FMCG | 4,287.16 | 4,403.30 | 2.71 |
Among the individual stocks, Manappuram and Muthoot Finance were the major losers, down by 19 and 12 per cent respectively. This was on the back of the RBI’s declaration of strict norms in terms of lending against gold for NBFCs. Jindal Steel & Power closed the week lower by almost 7 per cent after the announcement of the CAG draft report on the illegal allocation of coal blocks. Other stocks like Mundra Ports, Adani Power, Voltas, etc closed the week lower in the range of 7 to 10 per cent.
| Top Losers | ||
|---|---|---|
| Scrip | CMP | % Change (WoW) |
| MANAPRMGNF | 36.35 | -19.31 |
| Muthoot Fi | 147.00 | -11.63 |
| Renuka Sug | 32.85 | -10.00 |
| Voltas | 116.35 | -9.84 |
| MOIL Ltd | 253.80 | -7.61 |
| Mundra Por | 123.30 | -7.50 |
| Adani Powe | 67.95 | -6.92 |
| Engineers | 255.40 | -6.91 |
| JindalStlP | 536.15 | -6.80 |
| JSW Energy | 63.25 | -6.78 |
On the other hand, Tech Mahindra was among the biggest gainers with an increase of 21.55 per cent after it was reported that Satyam Computers would be merged with the company to synergize their strengths. TTK Prestige closed higher by 13.74 per cent during the week after CLSA turned positive on the stock and recommended a ‘buy’ rating for the scrip. Other stocks like LIC Housing Finance, Dish TV, Nestle, etc closed the week higher in the range of 6 to 7 per cent.
| Top Gainers | ||
|---|---|---|
| Scrip | CMP | % Change (WoW) |
| Tech Mahin | 737.40 | 21.55 |
| TTK Presti | 3081.65 | 13.74 |
| Bata India | 785.05 | 13.09 |
| Indiabulls | 232.10 | 7.21 |
| Nestle | 4690.00 | 6.94 |
| LIC Hsng F | 265.35 | 6.89 |
| Aditya Bir | 948.85 | 6.44 |
| SunPhrmInd | 578.95 | 6.22 |
| Dish TV | 57.90 | 6.14 |
| CadilaHeal | 750.85 | 5.46 |
In conclusion, we expect the churning to continue on the bourses ahead of this month’s end in the next week. As of now, investors are quite jittery about investing in the markets in the absence of any clear focus or direction. We would advise risk-averse investors to adopt a ‘wait and watch’ approach over the next couple of weeks and look out for developments in the results’ season.
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