Weekly Market Report: Pressure builds up on the bulls

The market ended lower for the week ended 15th October - the second week in a row - mainly on profit taking by institutional investors, unsupportive global cues and tardy economic triggers on the domestic front.

The indices ended with modest gains on Monday amid jittery and range-bound trade. A positive opening of the European market helped the market push the key benchmarks above the day's lows. The market settled lower on poor global cues and a fall in industrial growth for the month of August. The indices ended nearly three-quarters of a percent lower.

Supportive global cues and all-round buying interest sent the market on a higher trajectory on Wednesday. The indices closed the session with gains of around 1.3%. Nearly half the gains accrued on Wednesday were erased on Thursday as the market closed nearly a percent lower, despite good global cues. Institutional sell-off was seen as the main reason for the decline. The slide became more prominent on the last trading day of the week, prompted by weak monthly and weekly inflation data released by the government on Friday.

The market closed the week with a cut of 1% - the Sensex was down 125.21 points at 20,125 and the Nifty settled 40.80 points lower at 6,062.

The top gainers during the week were Tata Motors (up 5%), Sterlite Industries (up 3%), Wipro (up 2%), Tata Steel and HDFC (up 1% each). NTPC, Bharti Airtel (down 5% each), Reliance Communications (RCom), Larsen & Toubro (L&T) (down 3% each) and State Bank of India (SBI) (down 2%) were the prominent losers.

BSE Metal and BSE Auto (up 1% each) were the top performers in the sectoral space while BSE Power and BSE Capital Goods (CG) (down 2% each) down were the sectoral laggards in the week.

Driven by higher prices of essential items, the wholesale price index (WPI) based inflation moved up to 8.62% in September, with experts saying that it will prompt the Reserve Bank of India (RBI) to hike its short-term lending and borrowing rates at next month's policy review.

This is the second consecutive month in which the overall inflation has stayed in single digits. It had remained over 10% for five months till July.

Inflation was 8.51% in August. Meanwhile, the government has revised the July figure upwards to 10.31% from the early provisional figure of 9.97%.

Besides, food inflation numbers released by the government on Friday showed a marginal increase of 0.13 percentage points to 16.37% for the week ended 2nd October from 16.24% in the previous week.

The Index of Industrial Production (IIP) nosedived to 5.6% in August from 10.6% a year ago, mainly on account of decline in output of capital goods, a sector which reflects fresh investments in the economy. Capital goods production declined by 2.6%, manufacturing grew by 5.9%, mining decelerated to 7% and electricity generation to 1%.

India's foreign exchange (forex) reserves went up by $1.63 billion to $295.79 billion on the back of a healthy jump in foreign currency assets, making it the fourth consecutive weekly rise in the kitty.

Foreign currency assets, a major component of the forex pie, shot up nearly $1.59 billion to $268.10 billion for the week ended 8th October, data released by the Reserve Bank of India (RBI) said.

A slew of corporate results for the September quarter, the response to the much-hyped Coal India Ltd (CIL) initial public offer (IPO), due to open on Monday (18th October) and global economic triggers will provide direction to the domestic market next week.


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Financial Technologies group's GBOT to go live trading from Monday in Mauritius

GBOT will offer a basket of commodities and currency derivative products, including a global first for African currencies, on its platform regulated by Financial Services Commission of Mauritius.

Global Board Of Trade Ltd (GBOT), promoted by Financial Technologies Ltd, said it launched its first international multi-asset class exchange based out of Mauritius. The traditional sounding of the gong by Dr Navinchandra Ramgoolam, Prime Minister of Mauritius, marked the symbolic launch of GBOT. Trading on GBOT's state-of-the-art electronic platform will go Live on Monday 18th October, it said in a release. Over 300 global leaders from Africa, Europe, Middle East, Asia, the United States and Mauritius were present to witness the launch.

Speaking on the occasion, Dr Ramgoolam said, "We welcome currency derivatives segment as part of GBOT, with the Mauritian Rupee (MUR)against the US Dollar (USD), as well as other currency pairs. This will offer possibility to hedge in fluctuations on exchange rates, particularly for both importers and exporters and other companies. This is a small step for GBOT but a big stride for the Mauritian economy".

Jignesh Shah, vice chairman, GBOT and chairman, Financial Technologies Group, said, "The launch of GBOT will be a landmark development in redefining Africa's commodity and currency derivatives landscape. GBOT is well poised to cater to the demand for a transparent and efficient exchange that will ensure price discovery, risk management and hedging in tune with world benchmarks. Our new exchange will be instrumental in unifying the fragmented African financial markets and in bringing the world to Africa and the African potential to the world and to its own people."

GBOT will offer commodity as well as currency derivatives products on its state-of-the-art electronic exchange platform with efficient clearing and settlement systems to ensure counterparty guarantee for all trades. As it commences trading on 18th October, GBOT will offer trading in Gold and Silver futures as well as USD/MUR, South African Rand (ZAR)/USD, Euro (EUR)/USD, British pound or pound sterling (GBP)/USD and Japanese Yen (JPY)/USD futures. For the first time worldwide, two African currency futures will be traded, GBOT said.
GBOT has a growing list of members and partners such as State Bank of India (Mauritius) Ltd., Bank One, Arab Global, One Financial, Afrasia Bank, Mauritius Commercial Bank, Banque des Mascareignes, Barclays Bank and Bramer Banking Corporation and global media corporations namely Bloomberg and Thomson Reuters.


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