Markets snapped 5-week rally to end lower in the week to Oct 11 as investors booked profits at higher levels after Standard & Poor's (S&P) created jitters in the market when one of its reports, released during the week, mentioned that there is a significant chance of cutting India's credit rating. For the week ended Oct 11, the 30-share BSE Sensex lost 263 or 1.4% to end at 18,675. The S&P CNX Nifty slipped 71 points or 1.2% to end at 5676.
Late on Wednesday, Standard & Poor's cut Spain's rating two notches to BBB- minus, one step from junk status warning that an intensifying recession and poor response from euro zone policymakers to the crisis had left Spain highly vulnerable.
During the week, the World Bank cut its estimate for East Asian growth which undid some of the positive sentiment that followed last week's sharp drop in US unemployment for September. Investors fretted about the world's economic prospects after the International Monetary Fund (IMF) downgraded its global growth estimates for 2012 and 2013.
Visiting US Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke today met corporate India leaders and discussed the recent American policy measures like the quantitative easing and the economic climate in the country.
Meanwhile, uncertainty over the political scenario has surfaced once again. The Bahujan Samaj Party (BSP) leader Mayawati has said that she would decide tomorrow whether to support the incumbent UPA government or not. She also said that her party may support government's decision to allow 51% foreign direct investment (FDI) in multi brand retail only if it proves to be beneficial for farmers.
Meanwhile, industrial production grew by 2.7 per cent in August, reversing the trend of contraction witnessed during the previous two months. However, the overall factory output, as measured by the Index of Industrial Production (IIP), grew at a slower pace than 3.4 per cent recorded in August 2011.
From the sectoral indices, BSE FMCG index added 2% during the week, followed by healthcare, consumer durables and metal indices. However, the realty index underperformed with the index slipping 4% to 1,870. Oil & gas, IT mad power indices dropped 2-3% each.
Car sales in India fell in September for the second consecutive month, an industry body said on Wednesday, as high interest rates, rising fuel costs and slowing economic growth continued to drag down demand. BSE auto index ended down 2% at 10,274.
Infosys ended down 5.2% at Rs 2,395 after the company lowered its revenue guidance for the current fiscal 2013 in dollar terms. The IT major on Friday announced that it had posted a net profit of Rs 2,369 crore in the quarter ended September 30 — a 24.3 per cent increase over that seen in the same quarter a year ago. However, it disappointed the market yet again — for the third quarter in a row — by maintaining its already conservative dollar-term revenue expectation at five per cent growth for 2012-13.
HDFC Bank, however, ended up 1.3% at Rs 630 after the private lender's profit after tax for the quarter ended September 30, 2012 increased by 30.1% from a year ago to Rs 1,560 crore driven by stable margin, higher interest income and lower provisions.
Sun Pharma was the top gainer among the Sensex stocks. The stock advanced nearly 4% to close at Rs 715. Last week, the board of directors of pharmaceutical company has approved the proposal of raising up to Rs 8,000 crore through domestic or international offerings.
On the other hand, Bharti Airtel slipped 2% at Rs 260 after the empowered group of ministers (EGoM) imposed a one-time fee on incumbent operators prospectively for spectrum beyond 4.4 Mhz in GSM and 2.5 Mhz in CDMA. The cut of deadline will be the date when the cabinet clears the proposal.
BHEL tumbled 2% to Rs 245 after an inferno took grip of block number 3 this morning. BHEL has its mother plant in Bhopal and fire incidences are often reported here.
DLF dipped 8% to Rs 219 on the Bombay Stock Exchange after a fresh allegation from activist-turned-politician Arvind Kejriwal accusing the Congress-led Haryana government of favouring realty major. Meanwhile, Goldman Sachs downgraded DLF to 'neutral' from 'buy', saying slower approvals could result in fewer project launches, while cutting its pre-sale estimates for India's largest property developer.
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