Weak trend may persist unless the Nifty manages to close above 5,348
The market snapped its five week gaining streak to finish the week lower on a mixed set of corporate results and slowing industrial growth. Global growth concerns also weighed on investors. The market will now focus on June inflation data, set to be released on Monday, which will have a bearing on the RBI’s policy review at the end of the month, and quarterly corporate results.
The Sensex closed the week down 307 points (1.75%) at 17,214 and the Nifty settled at 5,227, a loss of 90 points or 1.69%. If the Nifty closes strongly below 5,190, we may see a serious downturn setting in. We may see weak trend persisting unless the index manages to close above 5,348 for change in the trend.
The benchmarks settled lower on Monday on dismal economic data from across the world. Optimism after European policymakers approved a financial package for Spanish banks helped the market settle higher on Tuesday. However, a sell-off in blue chips saw the market settling in the negative on Wednesday.
The subdued dollar guidance by IT giant Infosys dragged the market lower on Thursday with the IT sector ending as the top sectoral loser. On Friday the market erased all its gains in the second half of trade on profit booking to settle lower.
Among the sectoral indices, BSE Fast Moving Consumer Goods and BSE Healthcare ended flat while others settled lower. The top losers were BST IT and BSE TECk (down 5%) each.
The top Sensex gainers were ONGC (up 2%), GAIL India, Dr Reddy’s Laboratories, Coal India and HDFC Bank (up 1% each). The losers were led by Infosys (down 9%), Wipro (down 8%), Jindal Steel & Power, Tata Steel and Tata Power (down 5% each).
The Nifty was led by ONGC, GAIL (up 2% each), BPCL, HDFC Bank and Coal India (up 1% each). The losers in the week were Infosys (down 9%), Wipro (down 8%), Jindal Steel & Power, Tata Steel and Tata Power (down 5% each).
Industrial production growth rate slowed to 2.4% in May 2012 due to contraction in capital goods and mining output, coupled with poor show by manufacturing sector. The Index of Industrial Production was 6.2% in May 2011. Meanwhile, the industrial growth rate for April 2012 was revised to -0.9% from 0.1%, as reported earlier.
India’s exports contracted by 5.45%, year-on-year, to $25.07 billion in June due to the persisting global economic slowdown. Imports also declined by 13.46% to $35.37 billion, leaving a trade deficit of $10.3 billion, according to the Director General of Foreign Trade A Pujari.
During the April-June quarter of the current fiscal exports shrank 1.7% to $75.2 billion over the first quarter of 2011-12. Imports also dipped by 6.1% during the first quarter of 2012-13 to $115.26 billion. Trade deficit in Q1 declined to $40.06 billion, from $46.30 billion in April-June last fiscal.
Among key corporates which declared their Q1 earnings reports, Infosys was a disappointment while TCS and HDFC and HDFC Bank were in line with market expectations. Bajaj Auto, Hero MotoCorp, Kotak Mahindra Bank and Reliance Industries are some of the key companies that will declare their results next week.
On the global front, Moody's Investors Service on Friday downgraded Italy’s government bond rating by two notches to ‘Baa2’ from ‘A3’, with a warning that it could cut it much further if the country were to lose access to debt markets.
Moody’s said the downgrade was driven by Italy’s increased susceptibility to political event risk, such as a Greek exit from the euro zone or Spain requiring further aid.
US stocks rose for the week, reversing losses on Friday following good gains in JPMorgan Chase & Co and hopes that China will initiate fresh steps to boost growth amid concern about earnings and the global economy.
This is the third time in the last twelve days that the pilots have struck work over non-payment of salaries for almost five months. The earlier strike on 11th July saw 12 flights getting cancelled
New Delhi/Mumbai: Several flights of Kingfisher were cancelled on Saturday due to a strike by pilots to protest non-payment of wages for almost five months, reports PTI.
Three flights from Mumbai and several across the airline's entire network were cancelled.
An airlines spokesperson said, "A certain section of employees have decided to stay away from duties due to salary payments not being credited to the bank accounts of all employees by Friday. Kingfisher wishes to state that more than 75% of employees have actually received their promised salaries on Friday".
"We have further promised that the balance of our employees will receive their salaries by Monday", the spokesman said.
The passengers booked on these flights have either been re-booked or given refunds, he said.
This is the third time in the last twelve days that the pilots have struck work. The earlier strike on 11th July saw 12 flights getting cancelled.
The strike on 2nd July was called off after a few hours with the management promising to pay some sections of staff from 6th July.
Kingfisher is, at present, carrying out truncated domestic and international operations with about 15 aircraft, in place of 64.
A large number of its flight engineers have reportedly quit over the past five months, primarily due to delayed payments. In April, around 200 engineers reported sick as a mark of protest over the issue.
The airline, which has not posted profit since inception in May 2005, has reported a loss of Rs1,151.50 crore in the March quarter, has a debt of over Rs7,500 crore and almost an equal amount of accumulated losses.
EAS Sarma says that the government should make a sincere effort to stop Kalmadi from attending the Olympics. India would have gained global credibility by boycotting Olympics in the first instance, he feels
EAS Sarma, former secretary to the government of India, has appealed to the prime minister to protest and boycott upcoming London Olympics. In a letter, he said the organisers of the London Olympics have permitted Dow Chemicals to sponsor the games, despite the company's liability it inherited from Union Carbide and the Bhopal Gas tragedy.
The former secretary also asked the government to make sincere effort to stop Suresh Kalmadi, the prime accused in the Commonwealth Games scam, from attending the Olympics.
Here is the letter written by Mr Sarma...
Dear Dr Manmohan Singh,
Subject:- London Olympics- India should announce a total boycott
It is unfortunate that the organisers of the London Olympics should remain adamant about continuing Dow Chemicals, the infamous successor to Union Carbide, to continue as the sponsor of the Games. It is equally unfortunate that the organising committee should have the audacity to say that it was the Indians who should clean up Bhopal and Dow Chemicals had nothing to do with it. Perhaps some senior functionaries within your government should take the blame as it was they who facilitated Dow Chemicals to have its way in India in the first instance.
The Chief of the Ethics Committee of London Olympics, Meredith Alexander has quit on the Dow issue. Several British MPs have expressed their solidarity on this. It is the government that you head has so far maintained stoic silence! It is high time that the government takes the side of the Bhopal victims and their families for a change and announce a total boycott of the London Olympics. It will send the right message to the international community on the need to condemn corporate crimes as heinous as the one that was committed at Bhopal. If the government continues to maintain silence, it will indirectly subscribe to allowing corporate sins to be condoned. It will amount to a betrayal of the cause of the Bhopal victims.
Now, I understand that Suresh Kalmadi, a person who is responsible for bringing taint to Commonwealth Games, will be attending Olympics as a representative of India on International Olympic Committee (ICC). Does it not erode the credibility of India in the eyes of the rest of the world?
I request the government to make a sincere effort to stop Kalmadi from attending the Olympics.
I still feel that India would have gained global credibility by boycotting Olympics in the first instance.
I am addressing this letter to all political parties to do join the protesting British MPs and others.
Former Secretary to GOI