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Benchmark indices posted their second consecutive weekly decline, as the Reserve Bank of India (RBI) continued to maintain status quo on key policy rates. Selling by foreign investors also dampened the sentiment in the truncated week ended October 1. For five of the six trading sessions, foreign investors remained net sellers.
At its fourth bimonthly monetary policy review, RBI kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at eight per cent. The cash reserve ratio (CRR) of scheduled banks was unchanged at four per cent of net demand and time liabilities.
For the week ended October 1, the Sensex slipped 58 points, or 0.2 per cent, to 26,568, while the Nifty fell 23 points, or 0.3 per cent, to 7,945. In the broader markets, underperformance continued — the small-cap index was down 1.4 per cent, while the mid-cap index declined 0.7 per cent.
Sectors & stocks
Defensive stocks such as those in the information technology and health care indices clocked gains of about four per cent each. Owing to the festive season demand, consumer durables stocks rose about two per cent each. On the other hand, realty, power, metals, oil & gas, fast-moving consumer goods and banking stocks fell 2-4.5 per cent.
Sun Pharma advanced about 10 per cent during the week, standing atop the list of gainers, followed by Tata Consultancy Services, Infosys and Wipro, which gained about five per cent each. The other stocks that gained —Cipla, Mahindra & Mahindra, HDFC Bank and NTPC — rose 0.6-4 per cent. Among the major losers were Reliance Industries, Axis Bank, Tata Power, Tata Steel, ICICI Bank and BHEL, down four-six per cent each. ITC and HUL slumped three per cent each on profit-taking.
The week ahead
The market trend will be dictated by companies' earnings for the September quarter. Infosys is scheduled to announce its earnings on October 10.
From a global perspective, the US Federal Reserve is likely to release minutes of its September 16-17 meeting on Wednesday. Also, movements in crude oil prices will be closely watched. In the coming week, the strengthening of the dollar, on expectations of an early rate rise in the US, is likely to rattle the rupee.
