May Mayhem..Market Ends Lower

Further, the new telecom policy lent some cheer to the markets. The policy has proposed to de-link the spectrum from licenses, reduce the number of licenses, give the industry liberal merger and acquisition norms and remove the burden of roaming charges from the consumers.

On the global front, developed markets like that of the US and Europe also posted weak performances in the last week. Dow Jones, S&P and the other European markets like FTSE, CAC and DAX traded lower in the range of almost 1 per cent. This was on the back of dismal data of the US, jobless data and on the back of fear that the European debt crisis may worsen from here on. Also, there are reports that Greece might exit from the euro zone and the fears of new problems have started in Spain, thus adding more worries across the world. While the other Asian markets like Hang Seng and Nikkei closed in the negative territory, Shanghai closed the week higher by almost 1.7 per cent. The Chinese markets traded higher during the week after investors and traders speculated that the government may ease liquidity in order to boost the country’s growth.

Among the individual stocks, Tata Motors was the biggest index loser - down by 16.65 per cent to Rs 224.5 after reports that the JLR segment had posted lower margins. After the company posted its result, many of the research houses further downgraded the scrip resulting into a free fall during the week. Aurobindo Pharma also plunged by 10 per cent to Rs 105 after the company reported dismal March quarter numbers. For the March quarter of 2012, the company reported a 14 per cent drop in net profit to Rs 108 crore and for FY12 it incurred a loss of Rs 124 crore. TTK Prestige also closed lower by 8 per cent and continued its losing trend, slipping from the high level of Rs 3,655 in early May to the level of Rs 2,708 as of now. The other losing stocks included Pantaloon, Suzlon, Sun TV and Hexaware which were down in the range of 7 to 16 per cent.

On the other hand, Indraprastha Gas closed the week higher by 21 per cent to Rs 249.35 after the High Court gave a decision in the company’s favour against Petroleum and Natural Gas Regulatory Authority (PNGRB). The scrip actually rallied in the last half an hour of Friday’s trade and closed higher by almost 29 per cent. Other gas companies like Gujarat Gas, GSPL, etc also joined the party and closed up by 13 and 12 per cent respectively. Other stocks like Neyveli Lignite, Adani Port and Adani Port also closed he week higher by more than 9 per cent.

In conclusion, we expect the market to remain volatile for the next week. We advise investors to remain cautious and adopt a ‘wait and watch’ approach.