Markets ended lower for the week ended January 11 as the profit taking crept in at higher levels. On a weekly basis the BSE Sensex slipped 120 points or 0.6% to end at 19,663 and the 50-share Nifty slipped below the crucial psychological level of 6,000 to close at 5,951, down by a per cent or 65 points.
Meanwhile, the global markets ended higher as the positive remarks from the head of the European Central Bank, massive stimulus plan in Japan and stronger-than-expected Chinese trade data boosted the investor sentiment and also added to growing confidence about a pickup in global economic activity.
Back home, Prime Minister, Dr. Manmohan Singh said that despite domestic constraints and challenges, India is confident that the strong economic fundamentals, backed by sound policies, will enable the country to return to a higher growth path.
However, tension between India and Pakistan following the brutal killing of two Indian soldiers by Pakistani troops along the Line of Control in Poonch district of Jammu and Kashmir on Tuesday, 8 January 2013 weighed on the market sentiment.
On the macro economic front, Indian Railways hiked passenger fares by up to 20% across categories with effect from January 21. For AC I and II, this is the second fare hike this year. Second class fares were also hiked for the first time in ten years.
The hike in fuel prices and train fares may prevent headline inflation from moderating in the near-term, said C Rangarajan, chairman of prime minister's economic advisory council.
"We expect, under normal situation, the inflation to come down to about 7% by March. But of course we are taking actions in order to correct the suppressed inflation...They may come in the way of headline inflation coming down. But in the medium-term it (fuel price and fare hikes) it is a right kind of decision," Rangarajan said.
Dismal set of index of industrial production (IIP) numbers for the month of November further dampened the market sentiment. Industrial production declined marginally in November, by 0.1 per cent, against six per cent in the same month a year ago. This was after a 8.3 per cent growth seen the previous month and raised hopes of a rate cut by the Reserve Bank of India (RBI) in its monetary policy review on January 29.
Contraction in global demand hit Indian exports for the eighth consecutive month, with outbound shipments falling 1.9 per cent to $24.9 billion in December against $25.4 billion in the corresponding period of FY12.
Imports, however, increased 6.3 per cent to $42.5 billion last month, widening the trade deficit by 20 per cent to $17.7 billion in December 2012, compared to $14.7 billion in the year-ago period.
MOVERS & SHAKERS
Shares of public sector undertakings (PSU) oil marketing companies (OMCs) such as BPCL, HPCL and IOC were in limelight in this week's trades on reports that the government is likely to raise diesel and subsidized liquefied petroleum gas (LPG) prices in a phased manner.
“The petroleum and natural gas ministry had worked out various scenarios and the impact those would have on the government’s subsidy burden," the Business Standard report suggests quoting a senior government official.
Tata Motors registered its fresh 52-week high in this week's trade the stock jumped nearly 5% to end at Rs 337. The stock of India’s largest automobile company has rallied 20% in past one month compared to 1.4% rise in benchmark Sensex.
Infosys’, India's second-biggest software exporter, rose 16% for the week as results for the quarter ended December, announced on Friday, beat Street expectations in every aspect.
The Bangalore-based company reported 5.7 per cent quarter-on-quarter growth in net profit, well above the estimated two to three per cent growth. It also scaled up its revenue forecast, against an anticipated downward revision. This led to the company stock recording the highest ever single-day gain.
After opening about 13 per cent higher on Friday, the stock closed at Rs 2712.60 on the BSE, a rise of 16.9 per cent compared to the previous close. The company’s performance helped raise the BSE IT index 9.3 per cent. It also raised the stock of other companies in the segment such as TCS (3.8 per cent) and Wipro (6.1 per cent).
Reliance Industries Ltd, the owner of world's biggest refining complex in Gujarat, dropped 2.5% to Rs 870.70 for the week on alleged violation of insider trading norms in sale of shares of its erstwhile subsidiary Reliance Petroleum Ltd.
OUTLOOK
Indian investors are gearing up for key earnings results, including from Tata Consultancy Services Ltd (TCS) , Wipro, HCL Technologies, Hero MotoCorp, Axis Bank, HDFC Bank, Reliance Industries Ltd , and ITC Ltd in the coming week.
More From This Section
India's inflation data on Monday will be crucial in terms of judging the Reserve Bank of India's monetary policy stance on January 29.
“Nifty’s short-term bias has changed to negative for a target of 5850. The medium-term outlook remains positive with reversal at 5823, “ an analysis by brokerage firm Sharekhan showed.