Broader markets outperform, index heavyweights drag

For the week, the Sensex slipped 5.59 points, while the Nifty fell 2.65 points

The markets ended marginally lower, as benchmark indices were in the red in three of the five trading sessions, amid the escalating crisis in Iraq and the Centre deferring its decision on a gas price rise by three months.

For the week, the Sensex slipped 5.59 points, or 0.02 per cent, to end at 25,099.92, while the Nifty fell 2.65 points, or 0.03 per cent, to close at 7,508.8. Though the benchmark indices edged marginally lower through the week, broader markets outperformed—-the BSE mid-cap and small-cap indices rose about 2.5 per cent each. Discretion was observed ahead of June derivatives’ expiry, with investors eyeing the Modi-led government’s first Union Budget, slated to be announced on July 10. Meanwhile, in its biannual financial stability report, RBI on Thursday said prospects of an economic recovery seemed bright, following the formation of a stable government at the Centre.

Rupee

The rupee moved in a tight range of 60.06-60.15, closing at 60.08/dollar. Traders said there was demand from importers, especially from oil companies, to meet month-end import commitments. Index heavyweight ITC slumped about five per cent on media reports Union health minister Harsh Vardhan had suggested the finance minister to raise tax on retail prices of cigarettes from 45 per cent to about 60 per cent in the coming Budget.

Shares of oil & gas heavyweights such as Reliance Industries and Oil and Natural gas Corporation slipped about two per cent each after the government deferred a decision on a gas price rise till December 31. However, GAIL rose four per cent. Profit-booking was visible in the metals space, with companies such as Hindalco, Tata Steel and Sesa Sterlite ending the week in the red. Hindalco fell 1.7 per cent after the company, during market hours on Wednesday, said CRISIL had downgraded the company’s long-term debt rating from ‘AA+/stable’ to ‘AA/stable’. Sesa Sterlite and Tata Steel fell 0.05 per cent.

Bajaj Auto was the best performer for the week, with the company stock surging about six per cent after the government extended an excise duty concession on automobiles till December 31. The relief, announced in the interim Budget, was originally scheduled to end on June 30. Some of the other stocks in this segment were Hero MotoCorp, Mahindra & Mahindra and Maruti Suzuki—-up one-four per cent. Among banking stocks in the Sensex-30, only State Bank of India and Axis Bank closed with gains, adding two per cent each.

The BSE heath care index closed at a record high of 11,260. Dr Reddy’s Lab added 4.5 per cent after the pharmaceutical company launched duloxetine delayed-release capsules in the US market.

Sun Pharma gained 4.5 per cent, hitting record highs in intra-day trading on Friday. It was another positive week for Wipro and Tata Consultancy Services (TCS), which gained two-five per cent. TCS surged to a new intra-day high on the last trading day of the week.

Meanwhile, Infosys slipped about three per cent; however, on Friday, the stock closed 1.3 per cent higher due to indications of an improving demand environment, following Accenture reporting better-than-expected revenue for the quarter ended May.

Week ahead

*Reliance Industries to be in focus as SAT is likely to deliver its order on an insider trading case on Monday

*Monthly auto sales data

*US non-farm payroll data expected on July 3

*Data on infrastructure output, fiscal deficit for the first two months of 2014-15, external debt data and services and manufacturing PMI

*European Central Bank to take a decision on rates