 "Weekly: FII sales weigh, broader markets outperform")
The broader markets outperformed the benchmark share indices in the week to February 7 as investors turned their focus to mid-cap and small-cap shares available at attractive valuations. However, the benchmark share indices ended lower as foreign institutional investors booked profits in blue chip shares while concerns over downward revision in the GDP estimates for 2013-14 also weighed on investor sentiment.
Markets witnessed huge volatility during the week under review hitting four-month lows only to rebound in the latter half of the trading week as foreign institutional investors turned buyers. The India VIX, a volatility index based on the NIFTY Index Option prices, breached 20 during the week under review.
In the week to February 7, the 30-share Sensex ended down 137 points or 0.7% at 20,377 and the 50-share Nifty closed 26 points or 0.4% lower at 6,063. FIIs were net sellers in equities to the tune of Rs 1,666 crore during the week.
The Gross Domestic Product (GDP) is estimated to rise 4.9% in 2013-14 from 4.5% in the previous year, as per the advance estimates released by the Central Statistics Office (CSO) late Friday. For the previous year 2012-13 India's GDP growth was revised down to 4.5% from 5% estimated earlier.
Economic growth was estimated to grow sub-5% for the second year in a row in 2013-14, thanks to contraction in manufacturing for the first time since 1991-92. The other culprit was mining which too declined for the second straight year.
In January, India’s manufacturing sector expanded the most this financial year, while inflation, particularly on the raw material front, rose, according to the widely-tracked HSBC Purchasing Managers’ Index (PMI).
The PMI for January rose to 51.4 points from 50.7 in December. While a reading of above 50 shows expansion, one below 50 indicates contraction.
State-owned BHEL was the top Sensex loser down 10% after it reported a sharp 41% year-on-year (yoy) decline in net profit at Rs 695 crore for the third quarter ended December 31, 2013 (Q3) due to lower realization. L&T ended down 0.4%.
IT majors ended lower after lower-than-expected revenue growth guidance for 2014 by the US-headquartered Cognizant which follows the same offshore delivery model like Indian IT services companies. Infosys, TCS and Wipro ended down 2-4% each.
In the oil and gas space Reliance Industries and ONGC extended losses to end down 2% each.
However, auto shares which had weakened last week amid slowdown in January sales growth rebounded after they launched new vehicles at the Auto Expo 2014 in Delhi. Tata Motors, Mahindra & Mahindra, Maruti Suzuki, Hero MotoCorp and Bajaj Auto ended up 0.6-3% each.
Coal India was the top Sensex gainer to end nearly 9% up after the stock rebounded from the recent correction post the payment of huge dividend of Rs 29/share.
WEEK AHEAD
Markets will react to the government's downward revision of GDP growth estimates to 4.5% from 5% earlier.
Third quarter earnings of major companies such as Tata Motors, Hindalco, Tata Steel, Dr Reddy's Labs, SBI, Coal India, Cipla, Sun Pharma and ONGC will be in focus.
On Wednesday, February 12, the government will release inflation based on the consumer price index for January and the industrial production for December.
Further, the government will also release inflation based on the wholesale price index on Friday, February 14.
Markets witnessed huge volatility during the week under review hitting four-month lows only to rebound in the latter half of the trading week as foreign institutional investors turned buyers. The India VIX, a volatility index based on the NIFTY Index Option prices, breached 20 during the week under review.
In the week to February 7, the 30-share Sensex ended down 137 points or 0.7% at 20,377 and the 50-share Nifty closed 26 points or 0.4% lower at 6,063. FIIs were net sellers in equities to the tune of Rs 1,666 crore during the week.
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In the broader markets, the BSE Mid-cap index ended up 0.5% at 6,337 and the BSE Small-cap index ended up 1% at 6,329.
The Gross Domestic Product (GDP) is estimated to rise 4.9% in 2013-14 from 4.5% in the previous year, as per the advance estimates released by the Central Statistics Office (CSO) late Friday. For the previous year 2012-13 India's GDP growth was revised down to 4.5% from 5% estimated earlier.
Economic growth was estimated to grow sub-5% for the second year in a row in 2013-14, thanks to contraction in manufacturing for the first time since 1991-92. The other culprit was mining which too declined for the second straight year.
In January, India’s manufacturing sector expanded the most this financial year, while inflation, particularly on the raw material front, rose, according to the widely-tracked HSBC Purchasing Managers’ Index (PMI).
The PMI for January rose to 51.4 points from 50.7 in December. While a reading of above 50 shows expansion, one below 50 indicates contraction.
State-owned BHEL was the top Sensex loser down 10% after it reported a sharp 41% year-on-year (yoy) decline in net profit at Rs 695 crore for the third quarter ended December 31, 2013 (Q3) due to lower realization. L&T ended down 0.4%.
IT majors ended lower after lower-than-expected revenue growth guidance for 2014 by the US-headquartered Cognizant which follows the same offshore delivery model like Indian IT services companies. Infosys, TCS and Wipro ended down 2-4% each.
In the oil and gas space Reliance Industries and ONGC extended losses to end down 2% each.
However, auto shares which had weakened last week amid slowdown in January sales growth rebounded after they launched new vehicles at the Auto Expo 2014 in Delhi. Tata Motors, Mahindra & Mahindra, Maruti Suzuki, Hero MotoCorp and Bajaj Auto ended up 0.6-3% each.
Coal India was the top Sensex gainer to end nearly 9% up after the stock rebounded from the recent correction post the payment of huge dividend of Rs 29/share.
WEEK AHEAD
Markets will react to the government's downward revision of GDP growth estimates to 4.5% from 5% earlier.
Third quarter earnings of major companies such as Tata Motors, Hindalco, Tata Steel, Dr Reddy's Labs, SBI, Coal India, Cipla, Sun Pharma and ONGC will be in focus.
On Wednesday, February 12, the government will release inflation based on the consumer price index for January and the industrial production for December.
Further, the government will also release inflation based on the wholesale price index on Friday, February 14.