Sensex, Nifty may decline after Tuesday: Weekly Market Report

While the recent downtrend in Nifty seems over, a fresh downtrend may start soon in the later part of the upcoming week

The BSE Sensex closed the week that ended on 7th February, at 20,376.56 (down 137 points or 0.67%) while the NSE Nifty closed at 6,063.20 (down 26 points or 0.43%) for the week.


In our last weekly market report, we had mentioned that if the Nifty goes below 6,060, it may test 6,000 or lower. Nifty closed almost near 6,000 on Monday itself. The market sentiment was affected by the slowdown in Chinese manufacturing growth on one hand and on the other the government back home revised the GDP growth rate for the year ended 31 March 2013 downwards to 4.5% from 5% reported earlier. A Chinese manufacturing gauge fell to a six-month low in January as output and orders slowed. Nifty closed at 6,002 (down 88 points or 1.44%).


Negative closing of the US indices on Monday and the weakness on the Asian counterparts spread to the bourses back home on Tuesday. However Indian market was trying to recover from the day’s low which was hit at the start of the day. Data showed factory activity in the US expanded in January at the weakest pace in eight months as orders slumped. Nifty closed at 6,001 (down 0.90 point).


On Wednesday, Nifty closed at 6,022 (up 22 points or 0.36%). The headline HSBC services business activity index increased from December's 46.7 to 48.3 in January, signaling a moderate rate of output contraction that was the weakest in the current seven-month sequence of decrease.


Finance Minister P Chidambaram expressed doubt over passing any key legislation, except for the vote-on-account, during the extended part of the Winter Session of Parliament that began on Wednesday. The Finance Minister also assured that the red line for fiscal deficit drawn by him 18 months ago will not be breached.


Indian markets managed to come out from the sudden plunge, which it made at the beginning of the day, and closed in the positive. As anticipated the controversy over Telangana, along with a number of other issues, washed out proceedings in Parliament for the second day. Nifty closed at 6,036 (up 14 points or 0.23%).


News from US, Philadelphia President Charles Plosser, who votes on policy this year, said he foresees the economy to expand 3% in 2014 as the jobless rate falls to 6.2% by year-end, warranting a quicker tapering to bond purchases by the central bank.


On the back of the news from the US where the initial jobless claims dropped for the first time in three weeks, falling 20,000 to 331,000 in the period ended February 1 the indices back home moved up on Friday. After a volatile session where the Nifty traded almost in the green for the entire session, the index closed at 6,063 (up 27 points or 0.45%).


For the week, among the other indices on the NSE, the top two performers were Pharma (2%) and Media (2%) while the worst two performers were IT Sector (3%) and Service (1%).
Among the Nifty stocks, the top five stocks for the week were Coal India (9%); Tata Steel (8%); N T P C (8%); Ranbaxy (5%) and Lupin  (4%) while the top five losers were BHEL (10%); TCS (4%); HCL Technologies (4); Infosys (4%) and HDFC (3%).
Of the 1,354 companies on the NSE, 680 companies closed in the green, 628 companies closed in the red while 46 companies closed flat.
Out of the 27 main sectors tracked by Moneylife, top five and the bottom five sectors for this week were:
Top ML sectors   Worst ML sectors  
Energy 4% Software & IT Services -3%
Sugar 3% Non-Ferrous Metals -3%
Pharma 2% Shipping -1%
Auto Components 2% Oil & Gas -1%
Auto 2% Refineries -1%


Sensex, Nifty continue to be in an uptrend: Friday closing report

As long as the Nifty stays above 6,030, it may move higher

On Thursday, we had mentioned that the Nifty has to keep itself above 6,000, for the upmove to continue. Today, for the entire session the benchmark kept itself above this level and closed in the green for the third consecutive session on Friday. Today except for a few minutes trading in the red, both the benchmarks managed to stay well above Thursday’s close. The positive momentum existed on the back of fall in the jobless claims in the US.


The BSE 30-share Sensex opened at 20,441 and moved between 20,282 and 20,451 and before closing at 20,377 (up 66 points or 0.32%) while the NSE Nifty opened at 6,078 and traded between 6,031 and 6,080 before closing at 6,063 (up 27 points or 0.45%). The NSE recorded a volume of 54.66 crore shares.


The Indian economy is expected to grow 4.9% in FY14, marginally lower than the Finance Ministry's estimate of a 5% growth, a government statement said on Friday. The GDP grew 4.6% annually in the first half of the current fiscal year, down from 5.3% in the corresponding period a year ago. Growth slowed in almost all sectors, including services such as tourism, transport and telecoms.


Row over Telangana statehood and the harassment of Tamil fishermen by Sri Lankan Navy rocked Parliament for the third day today, turning the first week of the extended Winter Session into a complete washout.


US indices closed Thursday in the green. Initial jobless claims dropped for the first time in three weeks, falling 20,000 to 331,000 in the period ended February 1, according to the Labor Department. The monthly US jobs data will be released today.


All the Asian indices closed in the green. Nikkei 225 was the top gainer which rose 2.17%.


China's services sector grew at its slowest pace in almost 2-1/2 years in January. The HSBC/Markit Services Purchasing Managers' Index (PMI) retreated to 50.7 in January, a low last seen in August 2011 though still above the 50-point level that demarcates growth and contraction. December's PMI was 50.9.


European indices were trading in the green while US Futures were trading marginally higher.


In Europe, the European Central Bank kept interest rates unchanged on Thursday. The Bank of England kept its benchmark rate at a record-low 0.5%, while its bond-purchase plan stayed at 375 billion pounds ($611 billion) on Thursday.


UK factories increased production by less than forecast in December, suggesting manufacturing is set for steady rather than runaway growth this year. Output rose 0.3% from November, the Office for National Statistics said today in London. Industrial output rose 0.5% in the final three months of the year. Manufacturing grew 0.7% in the fourth quarter.


Urban consumption to remain subdued over next 6-12 months, says study

According to a survey conducted by Religare, travel, jewellery, luxury good and FMCG spends across urban India are weakening while home and car purchases are being deferred by consumers

Discretionary travel, jewellery, luxury goods and fast moving consumer goods (FMCG) spending among urban Indians is weakening. While gold is losing its lustre, home and car purchases are being deferred by urban consumers and this downtrend may continue over the next six to 12 months says a study.


Religare Capital Markets Ltd, in its "The 5th Urban Consumer Survey" found a marked decline in consumer confidence, especially in larger cities. "We expect consumption trends to remain subdued over the next 6-12 months, with H2FY14 growth rates likely to moderate given the high festive demand base of last year and comparatively early festive season in FY14. As such, we maintain our negative stance on the sector in view of the soft demand trends and fairly rich valuations," it said in the study.


The study was conducted across 100 plus towns and cities and over 1,000 people participated in the survey.


Here are the survey results...


Discretionary spend outlook muted:

Only 33% of respondents are more confident about economic and own growth prospects, down from 40%/51% in our November 2012/May 2012 surveys. Moreover, those in higher income households (HH) and metros are less upbeat than persons in lower income HH and tier-3 cities. Food inflation, although moderating now, has been hurting discretionary spends. In FMCG, we are seeing downgrading to cheaper products in select categories such as hair oil, toothpaste and health drinks, albeit not as evident as in our November 2012 survey, Religare said.


FMCG –what’s on the shopping list?

FMCG spends have moderated but key brand preferences stand out. In soaps, Dettol, Lux and Dove continue to dominate the market (16%, 15%, 15% market share, respectively based on respondent preferences), while P&G’s Head & Shoulders (H&S) is the most preferred shampoo brand. Notably, Dove, L’Oreal and H&S are doing well among higher income HH (Dove gaining strongly).

Overall, Hindustan Unilever (HUL) maintains its strong lead in home & personal care (HPC) with a steady 53% market share in soaps (unchanged from our November 2012 survey) and 43% share in shampoo (vs 40% last survey, widening its lead over P&G to 1,000 bps with the latter shedding 200bps to 33%).

In skin cream, HUL has about 50% share (Nivea, the biggest gainer at over 400bps to 17%) and in detergents, 62% (Surf dominates high income HH).


Colgate continues to lead in toothpaste with 47% market share (45% last survey) while HUL has lost 700bps from our last poll to35% now.


Asian Paints remains the most preferred brand in the paints category with a stable 54% share, while Berger has lost 200bps to 10%.


In footwear, BATA has improved its share to 27% (25%).

Homes and Cars –highly aspirational:

About 18% and 22% of consumers polled are looking to buy homes and cars, respectively over the next three to six months, though purchase decisions hinge on the economic outlook. Property and fuel prices are the key variables affecting purchase plans rather than interest rates.

Maruti is the most preferred auto brand with 48% market share (40% previously), followed by Hyundai at 23% (29%) and Tata Motors.



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