A close below the previous day’s low on the Nifty may indicate a reversal in trend
The Indian market ended the holiday-shortened week with a 4.5% gain on the back of positive triggers on the domestic front and hopes that US lawmakers would be able to sew a deal to avoid a “fiscal cliff”. Positive outlook by rating agency Moody’s and investment bank Goldman Sachs and the likelihood of the Parliament clearing pending Bills also supported investor sentiment. The discussion in Parliament on the FDI in multi-brand retail and release of key macro-economic indicators would be keenly watched next week.
The Sensex settled 833 points (4.50%) higher at 19,340 and the Nifty closed the week at 5,880, a gain of 253 points (4.50%). For the month of November, the Sensex rose 4.51% and the Nifty was up 4.63%. While we see the upmove on the market still continuing, a close below the previous day’s low may indicate a reversal in trend.
The market started the week with marginal gains amid volatile trade as the political logjam in the Parliament renewed concerns about the fate of the government’s reforms initiative. The market settled near the day’s high on Tuesday after ratings agency Moody’s retained India’s rating outlook as stable.
Resuming after a day’s break, the market closed in the green on Thursday as Goldman Sachs’ upgraded India to ‘overweight’ from ‘market-weight’ and on the end of the stalemate in Parliament. Continuing its gaining spree, the benchmarks settled in the positive for the fourth day on Friday despite lower GDP numbers for the September quarter.
BSE Consumer Durables and BSE Realty (up 7% each) were the top sectoral gainers in the week while BSE Auto and BSE PSU (down 2% each) were the main losers.
Sterlite Industries (up 13%), Bharti Airtel (up 10%), Cipla (up 9%), HDFC and Hindalco Industries (up 8% each) were the major gainers on the Sensex while Maruti Suzuki and Mahindra & Mahindra (down 1% each) were the losers.
The Nifty was led by Bharti Airtel, IDFC, Sesa Goa (up 10% each), Cipla (up 9%) and HDFC (up 8%). The losers on the index were Power Grid Corporation (down 2%), Maruti Suzuki and M&M (down 1%).
Ratings agency Moody's on Tuesday said India's credit outlook is stable supported by its credit strengths which include a large, diverse economy, strong GDP growth as well as savings, and investment rates.
Two days later, global investment bank Goldman Sachs upgraded Indian equities to ‘overweight’ from ‘market-weight’, as it expects economic growth to pick up to 6.5% in 2013 and further to 7.2% in 2014.
The issue of FDI in multi-brand retail will dominate Parliament next week with the Lok Sabha and the Rajya Sabha witnessing a trial of strength over the matter. The Lok Sabha (Lower House) will have a discussion on 4th and 5th December on the issue under a rule that entails voting which would be followed by a similar discussion in the Rajya Sabha (Upper House) on 6th and 7th December.
The Indian economy grew by 5.3% in the July-September period of the current fiscal compared to 6.7% in the same period of the last fiscal. GDP in the first quarter of FY 2013 stood at 5.5%.
On the international front, analysts in the US are gearing up to see the impact of Hurricane Sandy in economic indicators—manufacturing data, construction spending, auto sales, chain store sales and jobless claims—to be released next week. This apart, negotiations on taxes and spending cuts which have hardly made any progress, will also keep the US market alert.