Tough going for Nifty, Sensex: Weekly Market Report

The market will find the going tough unless there is clarity about the rupee and global capital flows

The domestic market finished in the red on global concerns after US Federal Reserve chief Ben Bernanke suggested that the central bank may scale down it bond-buying programme later this year. The decline in the market resulted in the benchmarks ending lower for the third week in a row. Global worries, which saw the rupee tumbling to an all-time low of 60 against the dollar on Thursday, also added to the market gloom.


The market is expected to remain volatile in the coming week on account of the expiry of the June futures & options derivatives contract. Current account deficit figures for the March quarter, which would be released by the government on Friday, will also be closely watched by investors.


The Sensex declined 403.69 points (2.1%) to 18,774 and the Nifty closed the week at 5,668, down 141 points (2.42%). Although the benchmarks settled in the green on three of the five trading days, losses on the other two days were responsible in bringing the market down. The market will find the going tough unless there is clarity about the rupee and global capital flows.


The market settled higher on Monday on buying in auto, capital goods and technology stocks in the second half of the day. Selling pressure from banking, consumer durables and PSU sectors led the market down on Tuesday. The market settled with minor gains on Wednesday amid volatile trade on nervousness ahead of the announcement from the US Fed about the future of its stimulus programme.


The market saw its highest percentage loss in the past 21 months on Thursday, which led the rupee making fresh all-time lows. Late buying in IT and technology stocks, as the declining rupee improved the prospects for IT exporters, helped the market close in the positive terrain on Friday.


BSE TECk (up 1%) was the lone gainer in the sectoral segment while BSE Realty (down 6%) and BSE Bankex (down 5%) were the biggest losers.


Bajaj Auto (up 4%), Wipro, Maruti Suzuki (up 3% each), Hero MotoCorp and Bharti Airtel (up 1% each) were the top gainers on the Sensex. The key losers were Jindal Steel & Power (down 16%), Hindalco Industries (down 10%), NTPC (down 6%), ICICI Bank (down 5%) and HDFC Bank (down 4%).


The major gainers on the Nifty were Ambuja Cements (up 5%), Bajaj Auto (up 4%), Maruti Suzuki (up 3%), Hero MotoCorp and Cairn India (up 1% each). The main laggards on the benchmark were JSPL (down 16%), Bank of Baroda (down 13%), Punjab National Bank (down 10%), Hindalco Ind and Jaiprakash Associates (down 9% each).


The United Progressive Alliance (UPA) government, finally seems to have woken up to the reality of the worsening economic situation, made worse due to the falling rupee, rising current account deficit (CAD) and concerns over withdrawal of funds by foreign institutional investors (FIIs). While the Cabinet Committee on Economic Affairs (CCEA) came up with several measures, finance minister P Chidambaram tried to calm the nerves over the domestic currency that touched a lifetime low on Thursday.


The rupee on Thursday plunged by 130 paise to hit life-time low of 60 against the US dollar in early trade on the Interbank Foreign Exchange on strong demand for the American currency from banks and importers. The Indian unit had earlier hit its all-time intra-day low of Rs 58.98 on 11th June.


The Reserve Bank of India (RBI), in its mid-quarter review of the monetary policy on Monday, decided to keep key interest rates, cash reserve ratio (CRR) and repo rates unchanged. According to economists, external risks, particularly weakness in the rupee, may have prevented the RBI from cutting rates. The CRR stands at 4% and the repo rate has been left unchanged at 7.25%.


India’s exports contracted by 1.1% year-on- year in May to $24.5 billion compared to  $24.77 billion in May last year. Imports grew by 6.99% to $44.65 billion during the period, leaving a high trade deficit of $20.1 billion, government data showed.


In international news, European Union finance ministers failed to secure an agreement on how best to downsize or close banks without calling on taxpayers to bail out the ailing lenders. The breakdown in negotiations could weaken the trust in Europe’s ability to stabilise its financial system.


US Fed chief Ben Bernanke, at the end of the two-day Federal Open Market Committee meeting on Wednesday, said the central bank may scale back its monthly bond-buying programme later this week and end it when the unemployment rate falls to 7%, most likely by the mid 2014.  The US jobless rate was 7.6% in May, up from 7.5% in April.


South Africa’s ibiboGroup to acquire ticketing firm

Commenting on the development, ibiboGroup CEO Ashish Kashyap said: “We see this as an exciting market opportunity. Online penetration of the bus market is only 5.7% compared to 28% for air travel, suggesting headroom for rapid future growth”

E-commerce firm ibiboGroup on Friday said it will acquire Bangalore-based online bus ticketing firm for an undisclosed amount.


ibiboGroup and Pilani Soft Labs Pvt Ltd, owner of have executed a binding agreement for the acquisition, the company said in a statement.


“This transaction will expand and diversify Ibibo Group’s existing travel assets— (a B2C travel aggregator) and TravelBoutiqueOnline (a B2B travel agency platform),” the statement added. sells more than a million tickets a month and has over 600 full time employees.


Commenting on the development, ibiboGroup CEO Ashish Kashyap said: “This gives us significant combined scale in terms of daily transaction volumes...We see this as an exciting market opportunity. Online penetration of the bus market is only 5.7% compared to 28% for air travel, suggesting headroom for rapid future growth.”


He further said India now has a network of good roads, which is increasing further. The number of buses would increase as people are opting for bus travel due to costly air travel and long wait-listed railway tickets, said Kashyap.


Pilani Soft Labs was founded in 2006 by three BITS-Pilani graduates—Phanindra Sama, Charan Padmaraju and S Pasupunuri, which own three products—redBus, BOSS and SeatSeller—serving the fragmented bus industry in India.


All travel entities of ibiboGroup, including will continue to run independently and operate as separate businesses to drive deep focus, it said, adding, the founders and management teams of would continue in their respective positions in the company.


IbiboGroup is owned by a holding company MIH, which is jointly owned by South Africa’s media house Naspers and China’s internet firm Tencen.


A short rally likely in Sensex, Nifty: Friday Closing Report
If Nifty does not break today’s low on Monday, it may move higher over the next 3-4 days
Late buying in IT and technology stocks amid volatile trade helped the market close in the positive terrain. If Nifty does not break today’s low on Monday, it may move higher over the next 3-4 days. The National Stock Exchange (NSE) recorded a volume of 71.13 crore shares and advance-decline ratio of 491:907.
The domestic market opened in the negative on continuing weakness in the rupee and on unsupportive global cues. US indices dropped over 2% in overnight trade following the Fed’s comments on Wednesday. Reflecting the sentiment, markets across Asia were also lower in morning trade today on concerns about the economic slowdown in China.
The Nifty opened 16 points lower at 5,640 and the Sensex started the day at 18,696, down 23 points. Selling in realty, metal, banking, capital goods and oil and gas sectors led the benchmarks to their lows in initial trade. The Nifty fell to 5,619 and the Sensex slipped to 18,615 at their respective lows.
However, the indices soon recovered from their lows on support from IT, technology, power and auto stocks.  The gains saw the benchmarks emerging into the green in late morning trade. 
The market hit its high in noon trade as the benchmarks extended their gains. At this point the Nifty rose to 5,686 and the Sensex rose to 18,821. But the indices soon pared their gains and returned to the negative on selling pressure in heavyweights in the post-noon session.
Late buying in IT and technology stocks helped the benchmarks settle higher, a day after the market plunged nearly 2%. The Nifty rose 12 points (0.21%) to 5,668 and the Sensex ended the session at 18,774, up 55 points (0.29%).
The broader indices underperformed the Sensex as they closed in the negative. The BSE Mid-cap index declined 1.28% and the BSE Small-cap index fell 0.38%.
The top sectoral gainers were BSE IT (up 1.43%); BSE TECk (up 1.11%); BSE Auto (up 0.34%); BSE Power (up 0.27% and BSE Oil & Gas (up 0.17%). The main losers were BSE Metal (down 1.45%); BSE Realty (down 1.02%); BSE Consumer Durables (down 0.41%); BSE Bankex (down 0.37%) and BSE Capital Goods (down 0.32%).
Out of the 30 stocks on the Sensex, 15 stocks settled higher. The top performers were ONGC (up 2.56%); Dr Reddy’s Laboratories (up 2.23%); Infosys (up 2.21%); NTPC (up 2.11%) and Maruti Suzuki (up 1.91%). The major losers were Jindal Steel & Power (down 8.06%); Hindalco Industries (down 4.20%); Sun Pharmaceutical Industries (down 1.85%); Sterlite Industries (up 0.98%) and Reliance Industries (up 0.66%).
The top two A Group gainers on the BSE were—Gujarat Mineral Development Corporation (up 6.17%) and Indian Hotels Company (up 4.87%).
The top two A Group losers on the BSE were—Future Retail (down 32.81%) and Karnataka Bank (down 15.50%).
The top two B Group gainers on the BSE were—Oscar Investments (up 20%) and Sarla Performance Fibers (up 19.96%).
The top two B Group losers on the BSE were—Future Retail (down 9.98) and Noida Medicare Centre (down 18.15%).
Of the 50 stocks on the Nifty, 25 ended in the in the green. The major gainers were IndusInd Bank (up 3.95%); Hindalco Ind (up 3.32%); ONGC (2.82%); Ranbaxy Laboratories (up 2.11%) and NMDC (up 1.88%). The key losers were JSPL (down 7.79%); Bank of Baroda (down 4.59%); Punjab National Bank (down 3.07%); Reliance Infrastructure (down 2.02%) and Sun Pharma (down 2%).
Markets in Asia, with the exception of the Japanese benchmark, closed in the red on account of the US Fed’s comments on Wednesday and Chinese growth concerns. However, a weak yen helped the Japanese market to close higher.
The Shanghai Composite declined 0.52%; the Hang Seng dropped 0.59%; the Jakarta Composite tanked 2.48%; the KLSE Composite fell 0.37%; the Straits Times slipped 0.28%; the Seoul Composite tanked 1.49% and the Taiwan Weighted settled 1.34% higher. Bucking the trend, the Nikkei 225 surged 1.66%.
At the time of writing, the main European markets were trading 0.46% to 1.05% higher and the US stock futures were in the green, indicating a positive opening for the US markets later in the day.
Back home, foreign institutional investors were net sellers of shares totalling Rs2,094.06 crore on Thursday whereas domestic institutional investors were net buyers of stocks amounting to Rs1,332.50 crore.
India’s largest sugar producer Bajaj Hindusthan (BHL) has put on block its entire holding in two group companies—Bajaj Energy Pvt Ltd (BEPL) and Bajaj Hindusthan (Singapore) Pte Ltd (BHSPL)—in order to consolidate its power business and avoid cross-holding from its sugar arm. The stock declined 4.70% to close at Rs14.20 on the NSE.
United Bank of India has decided to stop fresh lending to infrastructure, steel and iron, airlines and real estate and textile sectors. According to Archana Bhargava, chairperson and managing director of the PSU bank, non-performing assets in these sectors have been going up and the recovery has also been poor. The stock tumbled 6.95% to close at Rs46.20 on the NSE.



Manher Desai

3 years ago

If you look at product profile of FRESENIUS KABHI i am sure you will be tempted to buy this stock in small qty and remain as long term investor.


3 years ago

High dividend yield shares are better to pick up for excellent gain for short to medium term.

Wait a little longer and if bank shares have hit bottom then start picking them. Start with larger banks like SBI,ICICI, Canara Bank, PNB, BOB etc

Interestingly small banks some of them at current prices also are good dividend yield hence could be double whammy.
Karnataka bank , Andhra bank , syndicate bank etc are really good at current prices due to dividend yield and consiatant dividend payments.
However these are high volatile and hence are not for traders but for investors who can at least wait till next RBI announcement, eventually both CRR and interests have to go down. We are very close to the goal it could be couple of months maximum wait without fear when and if further fall happens , if one can steadfastly hold on to banking will reap windfall profits.

If one must trade , among the trio GVKPIL and LITL appear to be a total waste having gone below Rs 10 long back , are unlikely to move up. Results also are bad for them. However GMR Infra with a small dividend anounced is really attractive at current prices for betting , Stop loss is a must. Other bets can be Adani Enterprises , Essar Oil etc. Again not to bet without strict stop losses

ramanathan dwarakanathan

3 years ago

while I am not a technical expert.I feel pharma & IT cos are a better bet.


Manher Desai

In Reply to ramanathan dwarakanathan 3 years ago

For long term investor Pharma sector is best option and reasonably safe option as per my feel. In IT sector go for the TOP bets. As long as Rs is weak IT sector top companies has to perform.

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