 "Bear market")
The rout in Indian equities extended for the second straight week with benchmarks dropping to 19-month lows amid a sell-off in global stocks amid growth concerns in China and crash in crude oil prices. Further, weak earnings from select major corporates also dented sentiment.
In the week to January 15, the S&P BSE Sensex ended down 1.9% at 24,455 and the Nifty50 ended down 2.1% at 7,438.
In the broader market, the BSE Midcap fell nearly 6% while the Smallcap ended over 7% lower.
Meanwhile, foreign institutional investors seem to be on a selling spree after they sold stocks worth Rs 5,500 from the start of the year.
Crude oil prices slumped on fears that resumption of oil exports from Iran would add to the supply glut while lower demand from the world's largest economies also dampened sentiment. Global crude oil futures droppped sharply to hit 12-year lows to settle below $30 a barrel.
Among the key economic data, India's Consumer Price Index-based (CPI) inflation for December rose to 5.61 per cent, against 5.41 per cent in November and 4.28 per cent in December last year, as per official data.
Industrial output fell 3.2 per cent in November, contracting by the sharpest margin in the past four years, government data showed. The Index of Industrial Production (IIP) dipped for the first time in the past 13 months in November, after registering a five-year high rise of 9.8 per cent in October.
Wholesale price index (WPI)-based deflation persisted for a 14th straight month in December, the index dropping 0.7 per cent as compared to one of almost two per cent in November.
Banks which are a proxy to the economy were whipped after weak economic data while PSU banks emerged as the top losers amid worries over rising non-performing assets. Axis Bank and ICICI Bank lost 6%-10% each. Among PSUs, SBI, Bank of Baroda and PNB ended down 10%-12% each.
Capital goods majors L&T and BHEL also came under selling pressure during the week after sharp contraction in industrial production during November 2015.
ONGC ended down over 4% tracking sharp fall in global crude oil prices. The state-owned oil explorer also said it expects capital expenditure in the current fiscal by 10% amid lower exploration costs.
Hindustan Unilever managed to end with marginal loss despite weak third quarter earnings which is traditionally considered the strongest quarter for a fast moving consumer goods (FMCG) company. The FMCG major missed analyst estimates for the December quarter, the third such in a row, as profit slid and revenue growth remained muted.
TCS ended down nearly 6% after the IT major for the sixth quarter in a row missed the Street’s revenue estimates during the third quarter ended December 31, 2015 (Q3FY16)
However, Infosys surged over 7% after the company not only beat street estimates for the third quarter but revised its revenue guidance upwards. Infosys said that its revenue is expected to grow between 12.8%-13.2% in constant currency and 8.9%-9.3% in dollar term for the fiscal year ending March 31, 2016.
Index heavyweight Reliance Industries also managed to gain nearly 5% in a bearish market after several brokerages reported that its third quarter earnings would be boosted by higher gross refining margins coupled with the benefits of capex in the petrochemical and refining businesses.
WEEK AHEAD
Third quarter earnings will dictate the trend in the week ahead while trends in global crude oil prices will be on investors' radar.
Some of the major companies that will announce their third quarter earnings include, Asian Paints, Kotak Mahindra Bank, Wipro, Reliance Industries, Axis Bank, HCL Technologies, UltraTech Cement, Idea Cellular, ITC, Wipro and Cairn India among others.
Key economic data from China such as GDP for fourth quarter ended December 2015, calendar year 2015 and industrial production for December 2015 will be keenly watched.
