Key share indices ended tad lower for the week ended March 23, registering their fifth consecutive decline, as global growth and domestic concerns continued to weigh on investor sentiment.
In the global arena decline in factory output in China and the euro zone raised concerns of a global growth slowdown. Meanwhile, concerns over rising fiscal deficit, a report of $211 billion (Rs 10.67 lakh crore) revenue loss from the sale of coalfields along with roll back of rail fare hikes also weighed on market sentiment.
In the week to February 23, the 30-share Sensex ended down 104 points or 0.6% at 17,362 and the 50-share Nifty ended down 40 points or 0.7% to end at 5,278
The HSBC flash PMI, the earliest indicator of China's industrial activity, fell to 48.1 in March from February's four-month high of 49.6, with new orders sinking to a four-month low. Germany and France, the euro zone's leading economies, reported unexpected contraction in manufacturing activity, sending Markit's Composite PMI for the region down to 48.7 in March from 49.3 in February. A reading below 50 is
viewed as a contraction.
The Reserve Bank of INdia unveiled new norms in which stipulate that non-banking finance companies cannot exceed a loan-to-value ratio of 60% for loans against gold and prescribed a minimum Tier-I capital of 12%. Shares of Mannappuram Finance and Muthoot Finance were impacted by the announcement with their stock prices slumping 19.3% and 12%, respectively during the week.
In the corporate world, the merger between Tech Mahindra and Mahindra Satyam (erstwhile financial scam-hit Satyam COmputer) made headlines after boards of both companies agreed to merge Mahindra Satyam with Tech Mahindra in the ratio of 2:17. The merger will help consolidate the information technology / software and related businesses and to form a single entity providing services in this sector, a release said. Mahindra for every 17 held.
Reliance Communications-controlled FLAG Telecom has filed a prospectus in the Singapore Stock Exchange to list and divest 75% stake in the submarine cables business.
The Unitech Group agreed in principle to sell its stake in telecom company Uninor to joint venture partner Telenor at a fair value.
Meanwhile, Kingfisher Airlines continues to be embroiled in a difficult operating environment with cut in flight schedules and closure of international operations. Further, a freeze on its bank accounts by the income tax and service departments hamper its revival and is working to resolve the issues soon as possible.
Real estate company, Godrej Properties emerged as the first company to conduct a share-sale through the new Institutional Placement Programme after it received bids for 8.7 million shares against the 8.18 million new shares on offer. The price band for the issue was fixed at Rs 575-620 per share.
Anil Ambani-led Reliance Power has received a stay from the Delhi High Court against a notice for penalty of Rs 400 crore by the procurers of power from its Krishapatnam ultra mega power project in Andhra Pradesh.
The initial public offer (IPO) of state-run NBCC, which is likely to mop up about Rs 120 crore, opened for subscription on March 22 and will close on March 27. The government is divesting 10% stake in National Buildings Construction Corporation (NBCC) offering 12 million equity shares having a face value of 10 each.The shares are offered to investors in the price band of Rs 90-106. The issue was subscribed 23% so far after it received bids for 2.78 million shares against 12 million shares on offer.
Among the sectoral indices on the Bombay Stock Exchange, Power, Metal, Oil & Gas Indices ended down over 2.4% each while defensives such as FMCG and Healthcare indices gained.
In the Oil and Gas segment, index heavyweeight Reliance Industries ended down 3.6% at Rs 744, while in the Power sector BHEL ended down 2.7% and in the steel sector Jindal Steel, Hindalco slumped over 6% each.
In the FMCG sector both ITC and Hindustan Unilever were both up nearly 3% while in the healthcare segment Sun Pharma surged 6% to end at Rs 579.
The BSE Mid-cap Index ended down 0.2% at 6,351 while the BSE Small-cap Index ended down 1.2% at 6,626.
In the mid-cap segment, TTK Prestige, Bata India, Zydus Wellness and Century Textiles ended up 13-15% each. In the small-cap segment, Varun Industries was the top loser down 42% after the company said its promoters have pledged more than 50% of their stake in past one week.
The markets are likely to remain volatile in the following week ahead of the expiry of March derivative contracts. Further, on the macro-economic front, the government is scheduled to release Balance of Payment data for the quarter ended December 2011 and data on external debt as of end December 2011 on Friday, 30 March.