Despite touching 4-month highs intra-week, Friday the 13th seems to haunt the domestic stock market yet again after its upward trajectory during the past five weeks came to an abrupt end on account of selling pressure in index heavyweight Infosys.
For the week ended July 13, the 30-share Sensex slipped 307 points or 1.8% to end at 17,214. The 50-share S&P CNX Nifty dropped 90 points or 1.7% to close at 5227. The Sensex had surged 9.45% in the past five weeks starting from June 4 to July 8.
However, buying in select mid-cap and small-cap shares helped the broader markets outperform the benchmarks.The BSE Mid-Cap index ended 1% lower while the BSE Small Cap index slipped 1.25%.
On the macro economic front, the country's industrial output picked up more than expected in May, bolstering the case for the Reserve Bank of India (RBI) to keep interest rates high at its next policy meeting as a slow start to the monsoon puts pressure on inflation, especially food prices. IIP rose 2.4 percent in May from a year earlier, driven by manufacturing growth, data released on Thursday showed.
The earnings season kicked off during the week with HDFC, Infosys, TCS and HDFC Bank annoucing their first quarter numbers.
The losses during the week were led by software, consumer durables and metal shares. The BSE IT Index slumped 5.2%, Consumer Durables slipped 3.4% and Metal index ended 3.2% lower.
Infosys slumped 8.8% to end at Rs 2,228 after the software major shocked investors by slashing its dollar revenue guidance for the current fiscal to 5% from 8-10% forecasted earlier amid worries clients will reduce spending on outsourcing services due to global economic uncertainty. The IT-major reported a marginal decline of 1.2 per cent in its consolidated net profit at Rs 2,289 crore for the quarter ended June 2012. It was Rs 2,316 crore in the previous quarter ended March 31.
Interestingly, foreign investors sold 6.48 million shares or 1.13% stake in the company in April - June quarter, as per the data available on BSE website. This is the sharpest quarterly stake sale by overseas investors in the past fifteen quarters.
However, its peer TCS reported a better-than-expected a 14.5% quarter-on-quarter (qoq) growth in consolidated net profit at Rs 3,318 crore for the quarter ended June 30, 2012. Operational revenues grew 12.1% at Rs 14,869 crore on qoq basis. TCS ended the week marginally up by 0.3% while Wipro dropped sharply by 8.4% to end at Rs 359.
Metal shares lost their sheen during the week tracking weakness in global industrial commodity prices. Major losers include Tata Steel down 4.9% and Jindal Steel dropped 5.4%.
In the consumer durables space the impact was more prominent in companies have gold jewellery in portfolio after global gold prices corrected during the week. Gold traded nearly flat on Friday, but remained on course for a second consecutive week of losses as worries about the euro zone debt crisis and the absence of stimulus measures in the United States buoyed the dollar and its safe haven appeal.Titan dropped 5.6% to end at Rs 217 while Rajesh Exports ended 4% lower to end at Rs 130.
The country's largest mortgage lender HDFC reported 18.6% rise in net profit at Rs 1,002 crore during the April-June quarter, over the year ago period, because of healthy growth in advances.Net interest income of the pure-play mortgage lender jumped to Rs 1,372.55 crore from Rs 1,170.86 crore, while its tax liability rose to Rs 378 crore from Rs 331 crore during the quarter. HDFC ended down 1.3% at Rs 675. Net interest margin, a key gauge of profitability, stood at 4.3 percent in April-June, compared with 4.2 percent in the March quarter. The bank aims to keep this figure in a range of 3.9-4.2 percent in the near-term.
HDFC Bank, India's No.3 lender, beat forecasts with a 30.6 percent rise in quarterly profit, led by stronger loan growth, better fee income and higher net interest margins. Mumbai-based HDFC Bank said on Friday its net profit was 14.17 billion rupees in the fiscal first quarter-ended June, against 10.85 billion rupees a year earlier.
Among other shares in the Sensex, Tata Power ended down 4.6% at Rs 98.70 after global rating agency Standard & Poor's today lowered the credit rating outlook of Tata Power to 'negative', citing financial issues related to the company's 4,000 MW Mundra ultra mega power project. S&P revised downwards Tata Power's outlook to 'negative' from 'stable'. "The outlook revision reflects our expectation that Tata Power's cash flow and financial risk profile could deteriorate over the next six to nine months because the company has breached a debt-to-equity ratio covenant on loans to its Mundra project," S&P credit analyst Rajiv Vishwanathan said in a statement.
Shares of telecom service providers witnessed profit taking after gains in the previous week with the Cabinet considering a fresh proposal on prospective spectrum pricing and the telecom tribunal reportedly giving a split verdict in the 3G intra-circle roaming case. Bharti Airtel ended down 4.3% at Rs 308.
Among the mid-cap shares, Shriram City Union Finance has soared nearly 17% to end at Rs 741 after the company said one of its promoters will acquire 17.9 million shares of the company at a maximum price of Rs 803 per share through inter-se-transfer.
In the small-cap segment, DEN Networks surged 17.4% to end at Rs 122 after the company said that overseas investor - TIAA-CREF Investment Management, LLC has bought one per cent of the company through open market transaction. Total holding of TIAA-CREF Investment Management, LLC in broadcasting and cable TV Company now increased to 5.93% from 4.93% after this acquisition.
Inflation data on Monday, Presidential elections on Friday and first quarter earnings from Reliance Industries will be the key events to watch out for.