The markets extended their winning streak for yet another week,
(a special live trading session will be organized by the NSE and BSE on Saturday
May 11 for a duration of one and half hour from 11.15 a.m. to 12.45 p.m.) Though
there was some consolidation in the last of the week but the major indices
managed to snap the week higher by over two and half a percent and at their
highest level of 2013 on the back of gains in the initial three days and a rally
on Friday. After the disappointment of the RBI's policy decision, markets made a
good start of the week buoyed by firm global cues, also as Standard & Poor's
despite ruling out a rating upgrade for India at the current juncture, indicated
improvement in rating outlook. Though, the HSBC services Purchasing Managers'
Index (PMI), fell to its slowest pace in one and half years to 50.7 in April
from 51.4 in March and capped some gains. However, the jubilation remained on
track and the benchmarks surpassed their crucial 6,000 (Nifty) and 19,850
(Sensex) levels, their highest level in more than 13 weeks on the very next day
supported by higher capital inflows by foreign funds into the equity market. A
slew of good corporate earnings too provided some fillip to the markets, also
the National Council of Applied Economic Research (NCAER) said that the Indian
economy is likely to grow by 6.2 percent in the current financial year,
significantly higher than the Reserve Bank of India's GDP growth projection of
5.7 percent for 2013-14. There was some consolidation on Thursday and traders
opted to book profits after the recent rallies, some result disappointments too,
led the markets lower, however on Friday the markets bounced back on getting
better than expected IIP data, India's annual industrial output showing signs of
recovery, grew by 2.5% for the month of March 2013, higher than the previous
month's growth figure of 0.6%. Surprisingly Auto sector led the rally despite
Car sales in India falling for the sixth consecutive month with a 10.43% decline
and the markets ended at record high on Friday.
BSE movement for the week
The Bombay Stock Exchange (BSE) Sensex surged 506.98 points or
2.59% to 20082.62 during the week ended May 10, 2013. The BSE Mid-cap index was
up by 143.32 points or 2.25% to 6519.29 and the Small-cap index up by 133.96
points or 2.22% to 6166.34. On the sectoral front, FMCG up by 278.21 points or
4.23% at 6855.39, Auto up by 431.90 points or 3.99% at 11263.33, Consumer
Durables (CD) up by 250.55 points or 3.38% at 7672.11, IT up by 191.29 points or
3.25% at 6072.63 and Bankex up by 400.22 points or 2.82% at 14583.82 were major
gainers on the BSE sectoral space, while Metal down 1.22 points or 0.01% at
8785.28 was the only loser on the BSE sectoral front.
NSE movement for the week
The Nifty climbed by 150.75 points or 2.54% to 6094.75. On the
National Stock Exchange (NSE), Bank Nifty up by 385.70 points or 2.89% to
12752.30, CNX IT up by 215.15 points or 3.46% to 6439.85, while CNX mid-cap up
by 112.35 points or 1.42% to 8009.45 and CNX Nifty Junior up by 237.45 points or
1.95% to 12430.85.
FII transactions during the
week
Foreign Institutional Investors (FIIs) were net buyers in the
equity segment during the week with gross purchases of Rs 11973.60 crore and
gross sales of 7848.20 crore, leading to a net inflow of Rs 4125.40 crore. They
stood as net buyers in the debt segment as well with gross purchases of Rs
7321.70 crore against gross sales of Rs 2747.10 crore, resulting in a net inflow
of Rs 4574.60 crore.
Industry and Economy
Growth in the services sector, which makes up nearly 60% of the
country's economic output, eased dramatically during April as new orders came in
at a much slower pace, prompting firms to rein in hiring plans. As per the HSBC
services Purchasing Managers' Index (PMI), based on a survey of around 400
companies, fell to its slowest pace in one and half years to 50.7 in April from
51.4 in March. The services sector growth which rose an 18-month high in
January, fell for its third straight month in April and took the index very
close to the 50 mark that separates growth from contraction. Although the
business placed in firm rose during April, service providers mentioned extreme
weather and challenging market conditions for the slower pace of growth.
Outlook for the coming week
The passing week turned out to be extremely productive for
equity markets, which led the benchmark equity indices end near their record
highs of 2013 on the back of positive global set-up and improving macro
conditions.
Investors for the coming week would be keenly eyeing the
release of April inflation data, next crucial trigger for the markets after the
March's factory output numbers. India's main inflation gauge, Wholesale Price
Index data (WPI), which is up for release on May 14, 2013, is expected to have
eased for a third straight month in April. However, before this investors' would
also await the Consumer Price Index (CPI) data, scheduled to release on April
13.
Meanwhile, PSU's OMCs are expected to remain in action for the
coming week on the hopes that diesel prices would be hiked by Rs 1 per litre
during the weekend. Oil marketing companies have been hiking retail diesel
prices in a staggered manner by Re 0.50 per litre to lower the under-recoveries.
So far, the diesel prices have been hiked three times.
Additionally, deferred meeting of the Empowered Group of
Ministers (EGoM) on raising prices of natural gas could take place in the coming
week. However, this will depend on the availability of EGoM members. Key
ministries like finance and oil along with the Planning Commission have
unanimously supported aligning domestic gas price with the international market
to encourage oil and gas exploration firms to commit more investments in raising
domestic output.
Furthermore, investors would be looking for results from select
corporate such as Amara Raja, Aptech, Bank Of Baroda, Nestle India, Rashtriya
Chemical fertilizers, Reliance Power, Dr Reddys Lab, Elder Pharma, United Bank
of India, Century Textiles, J&K Bank, etc.
On the global front, investors would be watching for a slew of
major economic data from the world largest economy, United states, starting from
Retail Sales data on May 13, followed by the Producer Price Index, Industrial
production, Consumer Price Index, Housing Starts, Jobless Claims and finally the
Philadelphia Fed Survey.
