 "Markets snap 3-week winning streak as traders book profits")
The Sensex ended down 476 points or 1.92 per cent to end at 24,217 and the Nifty declined 137 points or 1.86 per cent to close at 7,230. After several weeks of out-performance, broader markets declined during the week. The Mid-cap Index slipped 2.3 per cent and the Small-cap Index ended 1.2 per cent lower. Meanwhile, foreign institutional investors were net buyers in equities to the tune of Rs 2,978 crore, as per provisional data on the Bombay Stock Exchange.
There was disappointment on the macro front, too, with the economy growing at 4.7 per cent, against 4.9 per cent projected in the advance estimates, official data showed on Friday. For the quarter ended March, growth in GDP (gross domestic product) was the same as in the December quarter at 4.6 per cent.
On the derivatives front, traders rolled over fewer positions into the June derivatives series, signalling that they could have taken some risk off the table following sharp gains in May. The rollover percentage of Nifty futures in the May series onto the next month was 60 per cent, in line with the previous month expiry but lower than its three-month average of 65 per cent. Market-wide rollovers stood at 64.5 per cent as against the three-month average of 62.7 per cent. The markets, which slipped into a consolidation mode since May 16, will be looking at the credit policy on June 3, the Budget in the beginning of July and/or some big-ticket reform measures on the part of the new government to give further direction to the markets.
Sectors & stocks
Defensives were back in vogue during the week with Health Care and FMCG pockets attracting most buyers. The respective indices gained 1-2.4 per cent. IT Index finished with a 0.2 per cent gain. Meanwhile, PSU, Consumer Durables, Oil and Gas, Power, Realty, Bankex and Metal indices were in red, losing ground by 2-6.5 per cent.
FMCG major, Hindustan Unilever up seven per cent was the top gainer in the Sensex pack. Dr Reddy’s and Sun Pharma — up six per cent and four per cent — were the major movers from pharma space.
From the auto space, only Mahindra & Mahindra ended up with a six per cent gain. During the week, the company declared it Q4 numbers, a stand-alone net profit (including MVML) of Rs 897 crore for the quarter — a growth of 0.95 against Rs 889 crore posted in the same quarter last year. IT space was in spotlight, post a surprising development when Infosys resident and Board member, B G Srinivas, tendered his resignation from the company. Srinivas was widely seen as the top contender for chief executive’s position at the Bangalore-based company after incumbent S D Shibulal’s retirement by January 2015.
As a result, the stock declined four per cent. Further, TCS and Wipro added one-three per cent.
Engineering giant Larsen & Toubro, up 2.5 per cent, was the other major gainer. The company reported a robust set of numbers, surprising the Street with operating margins at 14.4 per cent, against the Street’s estimate of 11.5 per cent.
Sesa Sterlite, HDFC Bank and Bharti Airtel — all ended between 0.5 and four per cent — were the only names to end the week in green.
HDFC, Coal India, SBI, BHEL and GAIL were the major draggers, losing six-eleven per cent.
Week Ahead
With the earnings season coming to an end, markets will now be looking forward to RBI’s policy meet on Tuesday, June 3.
Auto and cement companies will be in focus tracking their May sales numbers.