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Markets have extended gains for second consecutive week on initiatives taken by the RBI to stop the rupee depreciation along with consistent buying of Indian equities by foreign institutional investors cheered the sentiments.
Markets witnessed some profit booking during mid-week ahead of macroeconomic events scheduled next week, including August inflation data due on Monday and the likelihood of U.S. Fed’s decision to announce a reduction in its monetary policy stimulus. RBI will review its policy on September 20.
India's economy is expected to grow 5.3 percent this fiscal year, the prime minister's economic advisory panel said on Friday, sharply lower than an earlier estimate of 6.4 percent but higher than last year.
The revised forecast is roughly in line with projections of the RBI and many private economists, who expect Asia's third-largest economy to grow at around 5 percent, the same level as in 2012/2013.
INDIAN RUPEE
The Indian rupee gained marginally on Friday, wrapping up its best week in nearly fifteen months as foreign funds flowed into equities on the back of a rebound in risk assets as geopolitical risks abated.
The rupee ended at 63.49/50 to the dollar versus 63.50/51 last close. It gained 2.76 percent in the week, its best since June 2012.
The focus is now squarely on the U.S. Federal Reserve's meeting on Sept 17-18 at which it is expected to announce a trimming of its bond buying.
BENCHMARK & BROADER INDICES
The 30-share Sensex surged 462.70 points, or 2.40% over last week to end at 19,732.76 mark. The broad based NSE Nifty gained 170.20 points or 3% to 5,850.60 levels.
Moreover, BSE Midcap and Smallcap index witnessed a gain of 3.27% and 3.10% respectively during the week.
SECTORAL INDICES
BSE Realty and Capital Goods indices gained between 8-9% followed by counters like Power, Auto, Metal, FMCG, PSU, Healthcare and Banks, all surging between 2-5%. BSE IT index dropped 0.69%.
GAINERS & LOSERS
Larsen & Toubro surged during the week, ending 14% higher as the best Sensex performer. On Friday, capital goods shares gained after data on Thursday showed industrial production unexpectedly rebounded in July. Capital goods production rose for the first time in four months in July, posting annual growth of 15.6 percent.
Meanwhile, Goldman Sachs has added L&T to its ‘conviction buy’ list, citing attractive valuations, visible growth, strong balance sheet and a good track record of execution.
Tata Power closed 10.4% higher in the week ending September 13.
Mahindra & Mahindra gained 7.6% in the week. The stock is down 14% since July.
Earlier this month, M&M reported a 28% slump in its domestic sales in August. India’s auto sales are forecast to remain in the negative in FY14 even as car sales rose 15.4%last month, the first gain in ten months.
Sun Pharma added 6.6% to their value, taking its yearly gains to 53.2%.
Hero MotoCorp rose 6.4% in the last four trading sessions. Earlier this month, the company reported a 4%increase in sales in August.
On the losing side, Wipro, India’s No.3 software services firm, was the worst performer as its stock ended the week with losses of 2.8%.
State-run explorer ONGC lost 2.2%, while ICICI Bank and TCS both lost nearly 2%. Dr Reddy’s closed 1.5% lower.
KEY EVENTS TO WATCH OUT
The data on wholesale price index (WPI) for August 2013 on 16 September 2013.
Federal Open Market Committee (FOMC) scheduled next week, considered by many to provide an indication on the timing and size of the Fed's cutbacks in its bond-purchase program. The FOMC holds a two-day policy meeting on Tuesday 17 September and Wednesday 18 September 2013 to decide on interest rates in the United States.
The Reserve Bank of India will release a Mid-Quarter Review of Monetary Policy 2013-14 on Friday, 20 September 2013. This will be followed by Governor Dr. Raghuram Rajan addressing the media in the afternoon on that day.
The rupee movement will be tracked closely after it has shown signs of recovery after a steep slide.
Investors will closely follow political developments in Syria.
