Key benchmark indices edged lower for the week after global rating agency Standard & Poor's cut India's outlook to negative from stable citing slow progress on its fiscal situation, as well as deteriorating economic indicators. The BSE Sensex and the NSE Nifty closed the week which had a special trading session on Saturday, lower by 1-1.5%.
In the broader markets, the smallcap and the midcap index shed 2% each.
The major news for the week was S&P revising India outlook to negative. There is a one in three chance of a downgrade to India's credit rating if external conditions continue to deteriorate, the ratings agency said in a statement.
However, Finance Minister Pranab Mukherjee termed S&P's move a timely warning and assured economic reforms would be on track to rein in the fiscal deficit at 5.1 per cent of the gross domestic product (GDP) for 2012-13, as projected in the Budget. Also, Sensex companies declaring their Q4 numbers remained in spotlight through the week.
Among the sectoral indices, IT was the only index to close in the positive, with a 2% gain thanks to the better than expected Q4 results of TCS. The company had reported a 3.28% quarter-on-quarter (q-o-q) rise in net profit at Rs 2,895 crore. As a result of this, the stock reported its biggest intra-day rise in past two-and-half years with a 16% gain on the BSE.
Among other IT companies, Wipro, India's third-largest software services exporter, reported a 1.7% rise in quarterly net profit at Rs 1,481 crore for the quarter ended 31 March 2012. However, muted revenue guidance for the first quarter of 2012-13 was a dampner.
On the other hand, Realty, Capital Goods and Power indices tanked and closed the week with a 4.5-5% loss.
BSE Bankex shed 2.4% in the last six trading sessions. The quarterly results of ICICI Bank, Axis bank were the positive surprises from this pack. ICICI Bank reported better-than-expected 31% year-on-year (y-o-y) growth in net profit at Rs 1,902 crore for the fourth quarter of FY12, due to higher operational and other income. Axis Bank too reported a 25% jump in its net profit at Rs 1,277.27 crore for the fourth quarter of the 2011-12 fiscal.
Shares of telecom services provider companies such as Idea Cellular, Reliance Communications and Bharti Airtel took a hit after the Telecom Regulatory Authority of India (Trai) on Monday proposed a high reserve price for telecom spectrum to be auctioned, raising fears of an increase in mobile tariffs. Sensex stock, Bharti Airtel slumped 5%..
Among the Sensex stocks, the gainers for the week were TCS (up 10%), Sun Pharma, Relaince Industries and ICICI Bank which added 1% each.
Meanwhile, GAIL, DLF, BHEL, Bajaj Auto, SBI and L&T lost between 5-8%
Adding some cheer to the market was the MET department's announcement that India is likely to receive average monsoon rains this year, forecasting a third straight year without drought.
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