Markets flip flopped through out the week and ended on a negative note. After touching 33-month high on Monday, markets pared almost all the gains and ended in red commencing the week on negative note. This trend was seen almost through out the week as investors turned jittery and started locking profits ahead of the quarterly earnings. Sensex was unable to sustain the 221 points, gap-up opening on Wednesday which took the index to the weekly high of 20,669.95.
The index posted the first weekly loss in six weeks on Friday; the benchmark declined 1.1% this week to close at 20,250.56, the Nifty also ended at 6103.45.
Mixed global cues and selling pressure in metal stocks played a spoilsport through out the week. In the beginning of the week metal stocks shined, as investors rushed to buy gold and copper as a safe haven investment on back of a weak greenback. The yellow metal touched $1,335 an ounce on the Comex division of the New York Mercantile Exchange. Metal and resource related shares posted a sharp decline after the run-up dragging most of the regional markets down. The BSE metal index also ended down 1.5% on Friday.
While investors are playing safe, Emkay in a research note said that Indian markets are not yet in a bubble territory yet as Sensex EPS (Earnings per Share) PE (Price to Earnings Ratio) is at 19.3x/16.1 for 1FY/2FY (currently) versus 24.5x/20.4x 1FY/2FY seen on 10th January 2008, when markets touched all time high.
Overseas fund flows will continue to dominate the markets according to Emkay Global Financial Services; Foreign Institutional Investors have invested Rs 292 billion in the Indian equity markets, highest since January 1999, “there is buoyancy in the Indian capital markets based on FII inflow,” Emkay in a Research note said.
Also after the recent run-up profit booking was seen in the Auto index, the index was down 1.3% on Friday.
BSE mid and small-cap indices outperformed the Sensex. The indices gained 1.5% and 1% respectively this week. While the mid-cap index ended at 8,331, the small-cap index added 1089 points to 10,512.
The healthcare index soared 3% to 6,306.
Apollo Hospital soared 17% this week to Rs 531. Biocon jumped 13% to Rs 412. Dr Reddy's, Orchid Chemicals and Aurobindo Pharma gained 5% each.
Other gainers in the space included Cipla, Lupin and Ranbaxy. However, Glenmark and Jubilant Sciences dropped over 1.5% each in trades.
Oil & gas and consumer durables indices gained 1-2% each this week. Markets is awaiting PSU company Coal India's IPO which is set to open on October 18, 2010. The government plans to raise about Rs 15000 crore to Rs 16000 crore from divestment of 10% stake in Coal India. The Coal India IPO is billed as the country's largest issue ever.
However, the FMCG index slumped 3% to 3,626. Index heavyweight - Hindustan Unilever was the second biggest loser in the Sensex and dropped 4.5% this week to Rs 296.
ITC shed 3.7% at Rs 172. Colgate-Palmolive, Nestle and Godrej Consumer Products slipped 2-3% each.
On the other hand, Tata Global Beverages gained 7.6% at Rs 133. Ruchi Soya was also up 4.5% at Rs 134.
Capital goods index was down 1% at 16,249.
Among the Sensex stocks Reliance Communications soared 7% to Rs 180. Jaiprakash Associates gained 6.5% to Rs 132. Hindalco added 5% to Rs 215.
Market heavyweight, Reliance added 4% to Rs 1,048. Tata Power and ACC were up 1-2% each.
Meanwhile, Tata Steel shed 6% at Rs 627. HDFC Bank and Bharti Airtel dropped 3.8% each to Rs 2,403 and Rs 351, respectively.
ONGC, Larsen & Toubro, NTPC, TCS, DLF and Tata Motors were some of the other losers in the sector.
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