The downtrend may gain in strength if Nifty closes below 5,645
The market settled marginally lower on concerns about the US economy, as the world’s largest economy gets ready to implement $600 billion in spending cuts and hike in taxes early next year. Fears of another recession saw markets across the world settling lower, and India was no exception. Indian investors will focus on economic indicators like industrial output and headline inflation numbers in the holiday-shortened next week.
The Sensex closed the week at 18,684, down 72 points (0.38%) and the Nifty finished 11 points (0.20%) down at 5,686. The index may see the downtrend gaining strength if it closes below 5,645.
On Monday the market was directionless for almost the entire session but managed to close with a positive bias. A smart recovery in the last hour saw the market close an otherwise unexciting session, with modest gains on Tuesday. The re-election of Barack Obama as the US president led the benchmarks higher on Wednesday.
Re-emergence of global economic worries saw the market closing lower on Thursday. Pressure in PSU banking stocks following lower-than-expected net profit from State Bank of India led the market down on Friday.
BSE Realty (up 5%) and BSE Fast Moving Consumer Goods (up 2%) were the top sectoral gainers while BSE Capital Goods and BSE Oil & Gas (down 2%) each were the main losers.
Cipla, Tata Motors (up 4% each), HDFC (up 3%), ITC and Wipro (up 2% each) were the key gainers on the Sensex. On the other hand, Tata Power (down 5%), Hindalco Industries (down 4%), ONGC, Larsen & Toubro and Tata Steel (down 3% each) settled at the bottom of the index.
The Nifty toppers were Asian Paints (up 5%), Cipla, Tata Motors, HDFC (up 4% each) and ACC (up 3%). The laggards were led by IDFC (down 6%), Tata Power (down 5%), Hindalco Industries (down 4%), L&T and ONGC (down 3% each).
The HSBC India Manufacturing Purchasing Managers’ Index (PMI)—a measure of factory production—stood at 52.9 in October slightly up from September, when it was 52.8. The October reading points to a further improvement in the health of the manufacturing sector, which witnessed the weakest growth rate in nine months in August.
The HSBC Services PMI for October declined significantly to 53.8 in October from 55.8 in the previous month. The October reading was the slowest since April and was attributed to a decline in new orders and hiring levels.
Among corporates, State Bank of India on Friday posted a 30.16% jump in its net profit to Rs3,658.14 crore during the second quarter ended September 2012. However, the bank showed signs of stress on asset quality as the gross non-performing assets (NPAs) ratio jumped to 5.2% (Rs49,202.46 crore) from the year-ago period of 4.2%.
Arvind Kejriwal, former officer of the Indian Revenue Services (IRS) turned activist-politician on Friday alleged that despite receiving a list of 700 people who have bank accounts in HSBC in Geneva, the Indian government is reluctant to take action against big names like the Ambanis, Tandons, Goyal, Burmans of Dabur and Yash Birla.
Now that Barack Obama has been re-elected at the president of the US, the focus shifts to the “fiscal cliff” as the US government is set to implement a $607 billion spending cut and tax increases on 1 January 2013.
The situation in Europe seems to have no end as a deputy finance minister of Greece was reported saying that the country was fast running out of cash while it awaits the next tranche of its 130-billion euro ($165.16 billion) international bailout. This apart, the Bank of France, on Friday said the country is expected to see a 0.1% decline in GDP in the fourth quarter of 2012, highlighting fears of the nation slipping into recession.