Markets Snap Five Week Losing Streak, End Marginally Positive
DSIJ Intelligence / 31 Mar 2012
The markets have managed to put an end to their losing streak by ending this week on a marginally positive note, thanks to a surprising recovery that was seen on Friday, 30th March 2012.
The markets have managed to put an end to their losing streak by ending this week on a marginally positive note, thanks to a surprising recovery that was seen on Friday 30th March, 2012. The equity markets managed to notch up some solid gains on Friday, as the markets rallied by nearly 2%, after the Finance Minister, Pranab Mukherjee, commented that the holders of the participatory notes, or P-notes, will have no tax liability in India on the investments they make in the local equity market. This positive development helped market recover the losses suffered earlier during the week.
| Benchmark Indices | |||
|---|---|---|---|
| Index | 23-Mar-12 | 30-Mar-12 | % Change |
| SENSEX | 17361.74 | 17404.20 | 0.24 |
| NIFTY | 5278.20 | 5295.55 | 0.33 |
| Hang Seng | 20668.80 | 20555.80 | -0.55 |
| Nikkei | 10011.47 | 10083.56 | 0.72 |
| Shanghai | 2349.54 | 2262.79 | -3.69 |
| Dow Jones* | 13046.14 | 13145.82 | 0.76 |
| S&P 500* | 1392.78 | 1403.28 | 0.75 |
| NASDAQ* | 3063.32 | 3095.36 | 1.05 |
| Bovespa* | 65828.20 | 64872.00 | -1.45 |
| FTSE* | 5845.65 | 5742.03 | -1.77 |
| DAX* | 6981.26 | 6875.15 | -1.52 |
| CAC* | 3472.46 | 3381.12 | -2.63 |
| * Closing till Thursday | |||
The week started off on a very tepid and uncertain note, as investors and traders on D-street fretted over the negative impact that the government's borrowing program would have on the 10-year bond yields, which may further prompt the RBI to maintain status quo on key policy rates in the upcoming policy review. Later, as the week moved on, the government’s decision to introduce the General Anti-avoidance Rules (GAAR) to deny double taxation treaty benefits to foreign institutions routing money through Mauritius played a real spoilsport to an already dampened market sentiment. It seems that the current UPA govt. has been coming up with something new from time to time to throw the celebrations off gear and are giving the investor community no reason to cheer.
| Key Global Indicators | |||
|---|---|---|---|
| Index | 23-Mar-12 | 30-Mar-12 | % Change |
| Gold | 27,951 | 28,155 | 0.73 |
| Silver | 56,481 | 57,017 | 0.95 |
| Crude Oil (Brent) | 124.07 | 124.77 | 0.56 |
| Crude Oil (Nymex) | 105.90 | 103.90 | -1.89 |
On the global front, apart from the positive speech made by the US Fed Governor favouring an accommodative policy, nothing hopeful has emerged. China continues to dither under the pressure of an economic slowdown, as the annual earnings growth rate of corporate companies there have shown a massive decline. China is seen as the growth engine of the world economy, and hence, a slowdown there poses some grievous risks to the global economic recovery.
| Currency Rate | |||
|---|---|---|---|
| Index | 23-Mar-12 | 30-Mar-12 | % Change |
| USD | 51.17 | 50.96 | -0.41 |
| EURO | 67.80 | 67.95 | 0.22 |
| GBP | 81.18 | 81.95 | 0.95 |
| JYP (per 100) | 61.91 | 62.33 | 0.68 |
Back home, among the sectoral indices, the defensive bets like Healthcare and FMCG ruled the week, as they rallied by more that 2% each. Power was the worst performing index this week, losing more that 2% of its value, as there still isn’t any clarity on Coal India signing the FSA agreement.
| Sectoral Indices | |||
|---|---|---|---|
| Category/Index | 23-Mar-12 | 30-Mar-12 | Change (%) |
| Broad | |||
| MIDCAP | 6,350.92 | 6,346.38 | -0.07 |
| SMLCAP | 6,626.35 | 6,629.38 | 0.05 |
| BSE-100 | 9,135.50 | 9,164.06 | 0.31 |
| BSE-200 | 2,151.07 | 2,157.89 | 0.32 |
| BSE-500 | 6,737.92 | 6,759.63 | 0.32 |
| Sectors | |||
| HC | 6,466.76 | 6,625.74 | 2.46 |
| FMCG | 4,403.30 | 4,493.10 | 2.04 |
| AUTO | 9,998.62 | 10,134.88 | 1.36 |
| METAL | 11,223.41 | 11,346.31 | 1.10 |
| OIL&GAS | 8,059.08 | 8,087.50 | 0.35 |
| TECk | 3,569.10 | 3,562.41 | -0.19 |
| IT | 6,095.08 | 6,081.87 | -0.22 |
| REALTY | 1,790.51 | 1,776.96 | -0.76 |
| CG | 10,111.75 | 10,027.92 | -0.83 |
| BANKEX | 11,860.42 | 11,751.18 | -0.92 |
| PSU | 7,382.88 | 7,311.47 | -0.97 |
| CD | 6,469.15 | 6,402.49 | -1.03 |
| POWER | 2,136.59 | 2,090.97 | -2.14 |
Among the individual stocks, Ranbaxy is among the top gainers this week as its shares rallied by almost 13% during the week. This was after rumours hit the market that the promoters may initiate a buyback for its shares. On the other hand, gold NBFCs Manappuram Finance and Muthoot Finance were yet again among the top losers, as the RBI continued to clamp down hard on their business.
| Top Gainers/Losers | |||||
|---|---|---|---|---|---|
| Gainers | CMP | % Change (WoW) | Losers | CMP | % Change (WoW) |
| Ranbaxy Labs | 469.00 | 12.89 | OptoCircuits | 203.45 | -25.99 |
| PidiliteInds | 177.55 | 12.44 | MANAPRMGNFIN | 30.40 | -16.37 |
| United Spiri | 606.05 | 11.36 | Muthoot Fin | 126.45 | -13.86 |
| Dish TV | 63.85 | 10.28 | Gitanjali | 325.00 | -13.18 |
| Shree Cement | 3215.00 | 8.65 | HDIL | 85.45 | -10.52 |
| MRPL | 67.90 | 8.29 | Indiabulls | 207.70 | -10.51 |
| CumminsIndia | 496.85 | 7.84 | Suzlon | 25.30 | -9.64 |
| UNION BANK | 234.90 | 7.51 | RCF | 56.65 | -8.26 |
| Bosch | 8250.60 | 7.15 | CESC | 272.15 | -7.46 |
| HPCL | 303.20 | 6.55 | IB Real Esta | 63.80 | -6.66 |
In conclusion, despite this turnaround seen on Friday, we expect the volatility on the bourses to continue in the week ahead, as investors and traders on the street grapple over the outcome of yet another disappointing quarter results for the Jan-Mar period. Auto and Cement shares would be in focus, as the companies announce their monthly sales and dispatch numbers for Feb. The markets would also look forward to the HSBC Monthly PMI data, indicating the health of the manufacturing sector, which is likely to be released on Monday, 2nd April, 2012.
| Institutional Turnover | ||
|---|---|---|
| Date | FII | DII |
| 26-Mar-12 | -135 | -201 |
| 27-Mar-12 | 43 | -290 |
| 28-Mar-12 | -148 | 73 |
| 29-Mar-12 | -1333 | 300 |
| 01-Mar-30 | 963 | -167 |
| Total | -610 | -285 |
We advise investors to remain cautious ahead and to stick to stock specific bets rather than to go bullish on any particular sector ahead of the Mar quarter results.
| Volumes (Rs.cr) | ||
|---|---|---|
| Date | BSE | NSE |
| 26-Mar-12 | 3801 | 10690 |
| 27-Mar-12 | 2906 | 13132 |
| 28-Mar-12 | 3686 | 10907 |
| 29-Mar-12 | 2004 | 14690 |
| 30-Mar-12 | 3684 | 12053 |
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