 "Markets drop third straight week; Nifty breaches 8,000")
Benchmark share indices dropped to their lowest closing levels in eight months to end lower for the third straight week on concerns over earnings growth and weak monsoon. Further, fears that foreign funds would continue to remain sellers amid a weakening rupee also dampened sentiment.
For the week ended June 12, 2015, the 30-share Sensex dropped 343 points or 1.3 per cent to end at 26,425 and the 50-share Nifty ended down 1.6 per cent to settle at 7,983.
“There is risk averseness in the stock markets because of concerns over corporate earnings growth, fears of hike in US interest rates and the uncertainty surrounding the monsoon. Further, Greece debt woes also continues to weigh on sentiment,” says Jagannadham Thunuguntla, head of fundamental research at Karvy Stock Broking.
The broader market underperformed the benchmark indices. The BSE Mid-cap index eased 2.2 per cent to close at 10,122 and the BSE Small-cap index dropped 2.6 per cent to end at 10,574.
The Indian rupee which had closed at 63.75 to the US dollar last week weakened further to settle at 64.06 amid capital outflows and firm demand for the US currency.
In the quarterly review meeting, the Finance Minister took stock of the Non Performing Assets (NPA) issue, and has sought an explanation on stress from banks that have high level of NPAs. Meanwhile, the government is preparing a roadmap to reduce stress on balance sheets of banks on the account of NPAs.
India’s industrial output grew 4.1 per cent in April, compared with 2.5 per cent in March. The recovery was mainly on account of a surge in the manufacturing sector, according to data released by the government on Friday.
Consumer Price Index-based inflation surged to a three-month high of 5.01 per cent in May, even as the food segment saw a decline in the rate of price rise, as per the data released on Friday. The inflation had stood at 4.87 per cent in April 2015 and 8.33 per cent in May 2014.
Buzzing stocks
Cipla dropped 6.5 per cent to emerge as the top Sensex loser after its peer Mylan launched an asthma drug in UK which was earlier expected to be launched by Cipla.
Tata Motors edged 4.7 per cent lower on worries about a slowdown in China and weak JLR sales. Tata Steel slipped 4.3 per cent after Britain’s largest trade union, Unite, has said workers of Tata Steel Europe are ready for an indefinite strike if the management does not negotiate on its proposal to scrap the British Steel Pension Scheme.
Sun Pharma ended down 4 per cent as the issues at Halol unit are likely to take longer-than-expected and higher remediation costs for Ranbaxy’s four facilities would impact margins.
IT exporters lost ground after US authorities initiated an investigation against Infosys Technologies and Tata Consultancy Services for alleged violation of visa rules. According to a New York Times report, the Department of Labour has opened an investigation against TCS and Infosys for “possible violations of rules for visas for foreign technology workers under contracts they held with an electric utility, Southern California Edison”. Infosys, Wipro, TCS and HCL Tech ended down 1.8-3.8 per cent each.
FMCG major ITC ended down 2.6 per cent after the Food Safety and Standards Authority of India (FSSAI) on Monday asked states to conduct thorough tests on “non-standardised food products” such as noodles, pasta, and macaroni made by seven manufacturers, which includes ITC’s three variants of Yippee.
Reliance Industries ended down 1.9 per cent. Chairman and managing director, Mukesh Ambani, is set to launch its telecom business under the brand name Reliance Jio by December.
Week ahead
The trend for Monday will be dictated by industrial growth in April and consumer price inflation in May. The government will also release the Wholesale Price Index-based inflation on Monday. Further, the two-day US FOMC meet is scheduled to begin on June 16.
For the week ended June 12, 2015, the 30-share Sensex dropped 343 points or 1.3 per cent to end at 26,425 and the 50-share Nifty ended down 1.6 per cent to settle at 7,983.
“There is risk averseness in the stock markets because of concerns over corporate earnings growth, fears of hike in US interest rates and the uncertainty surrounding the monsoon. Further, Greece debt woes also continues to weigh on sentiment,” says Jagannadham Thunuguntla, head of fundamental research at Karvy Stock Broking.
The broader market underperformed the benchmark indices. The BSE Mid-cap index eased 2.2 per cent to close at 10,122 and the BSE Small-cap index dropped 2.6 per cent to end at 10,574.
The Indian rupee which had closed at 63.75 to the US dollar last week weakened further to settle at 64.06 amid capital outflows and firm demand for the US currency.
In the quarterly review meeting, the Finance Minister took stock of the Non Performing Assets (NPA) issue, and has sought an explanation on stress from banks that have high level of NPAs. Meanwhile, the government is preparing a roadmap to reduce stress on balance sheets of banks on the account of NPAs.
India’s industrial output grew 4.1 per cent in April, compared with 2.5 per cent in March. The recovery was mainly on account of a surge in the manufacturing sector, according to data released by the government on Friday.
Consumer Price Index-based inflation surged to a three-month high of 5.01 per cent in May, even as the food segment saw a decline in the rate of price rise, as per the data released on Friday. The inflation had stood at 4.87 per cent in April 2015 and 8.33 per cent in May 2014.
Buzzing stocks
Cipla dropped 6.5 per cent to emerge as the top Sensex loser after its peer Mylan launched an asthma drug in UK which was earlier expected to be launched by Cipla.
Tata Motors edged 4.7 per cent lower on worries about a slowdown in China and weak JLR sales. Tata Steel slipped 4.3 per cent after Britain’s largest trade union, Unite, has said workers of Tata Steel Europe are ready for an indefinite strike if the management does not negotiate on its proposal to scrap the British Steel Pension Scheme.
Sun Pharma ended down 4 per cent as the issues at Halol unit are likely to take longer-than-expected and higher remediation costs for Ranbaxy’s four facilities would impact margins.
IT exporters lost ground after US authorities initiated an investigation against Infosys Technologies and Tata Consultancy Services for alleged violation of visa rules. According to a New York Times report, the Department of Labour has opened an investigation against TCS and Infosys for “possible violations of rules for visas for foreign technology workers under contracts they held with an electric utility, Southern California Edison”. Infosys, Wipro, TCS and HCL Tech ended down 1.8-3.8 per cent each.
FMCG major ITC ended down 2.6 per cent after the Food Safety and Standards Authority of India (FSSAI) on Monday asked states to conduct thorough tests on “non-standardised food products” such as noodles, pasta, and macaroni made by seven manufacturers, which includes ITC’s three variants of Yippee.
Reliance Industries ended down 1.9 per cent. Chairman and managing director, Mukesh Ambani, is set to launch its telecom business under the brand name Reliance Jio by December.
Week ahead
The trend for Monday will be dictated by industrial growth in April and consumer price inflation in May. The government will also release the Wholesale Price Index-based inflation on Monday. Further, the two-day US FOMC meet is scheduled to begin on June 16.