The indices are heavily oversold and could rally over the next few weeks
Market this week saw the rupee hitting its all time low, forcing the Reserve Bank of India (RBI) to take measures to control the volatility of domestic currency.
During the week, Indian stock markets broke five consecutive weeks of negative closing. The Sensex rose 100 points (or 0.54%) to close this week at 18,620 and the Nifty settled at 5472, up 0.05 points.
On Monday, the statement given by financial services secretary, Rajiv Takru, that measures to attract fund flows are under consideration, helped the indices close higher. On Tuesday, concerns about the impact on the fiscal deficit with the passage of food security bill made the indices to end lower, thus breaking the trend of three days of sequential gains. On Wednesday, the Sensex managed to make a strong recovery after hitting a 12-month intra-day low. The recovery was on the market buzz that LIC of India was buying shares. The rupee hit historic low of Rs68.75 per US dollar, posting its biggest daily percentage fall in 18 years.
On Thursday the market closed positive. The latest step taken by RBI to control currency volatility by providing a special window with immediate effect under which the RBI will undertake sell/buy US dollar- India rupee forex swaps for fixed tenor with oil marketing companies through a designated bank. On Friday, with the improvement in the gross domestic product (GDP) and jobless claims data from the US and the concerns over Syria easing, the Sensex ended in the positive, which is its 11-day closing high. US home sales data, which came out on 23 August 2013, fell sharply in July to its lowest level in nine months.
Among the Nifty-50 stocks, Sesa Goa (23%); Tata Consultancy Services (11%); H C L Technologies (10%); Dr. Reddy's Laboratories (8%) and Hero MotoCorp (8%) were the top five gainers while among the top five losers were I D F C (22%); Axis Bank (15%); Punjab National Bank (11%); Oil & Natural Gas Corp (10%) and Bharat Petroleum Corp (9%)
Out of the 27 main sectors tracked by Moneylife, top five and the bottom five sectors were:
Top ML sectors |
| Worst ML sectors |
|
Software & IT Services | 8% | Oil & Gas | -8% |
Non-ferrous Metals | 6% | Financial Services | -7% |
Shipping | 5% | Banks | -4% |
Pharma | 5% | Consumer Durables | -3% |
Hotels | 4% | Real Estate | -3% |
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