Indian stocks failed to reverse the downtrend in the week ended February 8, dragging the bench mark indices to a nearly one and half month low. The previous week too witnessed a fall in the stock prices. The fall during the week is consistent as investors were worried about the continued slashing of economic growth for the fiscal year, ending in March.
Traders were also concerned about the additional floating of shares in the market in the coming months as the government is gearing itself to disinvest a part of its holding in public sector units and the deadline for meeting the Securities & Exchange Board of India's directive to private companies for a minimum 25 percent of public holding.
The trading pattern during the week suggested that the bears were waiting in the wings to enter the market at the right time. This could be seen from the way the markets gained in January. The Bombay Stock Exchange's 30-share barometer recorded 2.41 percent gain in January alone. However, the first week of trading in February has almost wiped out the gain as the Sensex is tottering at 19484.77 points; though still recorded a gain of 58.06 points or 0.30 percent from last year's closing.
The major news to hit the Indian stock markets during the week included, farm sector to grow 1.8 percent on top of a 3.6 percent growth last year, while manufacturing is seen to grow at 1.9 percent versus 2.7 percent upside in the previous year; government raises Rs.110 billion from the sale of part of its stake in National Thermal Power Corporation; Vodafone to challenge Income Tax notice on the transfer of
shares; government department is pitching for a lower taxes on companies to spur investments; Supreme Court issues notice to 2 Sahara companies; Anil Ambani of Reliance ADAG and Cyrus Mistry of Tata Sons will be part of government's panel on power sector; IMF pegs economic growth at 5.4 percent for the financial year 2013; Vijay Mallya-controlled United
Breweries' auditors raised concern over the company's exposure to beleaguered Kingfisher Airlines; RBS fined $615 million in rate fixing scam; India's exports of gems and jewelry weakened by 27.5 percent in December from the previous year on sluggish demand in the U.S. and the European Union, which are considered to be traditional markets; per capital income rose 11.7 percent per month in 2012-2013; and HSBC
Services Business Activity Index increased to 57.5 in January from 55.6 in December.
Right from Monday or from day one in February, the Indian stock markets have been struggling to see uptick and are pressured towards downside.
The BSE's Sensex lost 0.15 percent on Monday, had a 0.46 percent fall on Tuesday, and another 0.10 percent drop on Wednesday. The last two
trading sessions too were no different with Thursday and Friday recording a fall of 0.30 percent and 0.49 percent, respectively.
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Finally, the BSE's benchmark index dropped 296.42 points or 1.5 percent for the week to finish at 19,484.77 from 19781.19, while the National
Stock Exchange's Nifty witnessed a fall of 95.4 points or 1.59 percent to end at 5,903.5 points from the previous close of 5,998.9 points.
Among the sectoral indices, BSE IT sector alone closed in the green leaving other indices to finish the week in the red. While Consumer
Durables and PSU witnessed a fall of 5.24 percent, 4.7 percent, respectively, Power and Metals recorded a drop of 4.3 each.
Of the 30 share Sensex pack, 23 companies' shares closed in the negative territory, while seven of them finished in the green during the week
ended February 8. Oil and petrochemical company Reliance Industries continued its downtrend losing 3.27 percent, while another index
heavyweight and FMCG company ITC slipped 2.43 percent. Pharma sector provided a mixed bag of fortunes. While Cipla shares
plunged 7.9 percent, Sun Pharmaceuticals advanced 3.37 percent. Other Sensex shares to gain were HDFC, HDFC Bank, and Wipro by 3.85 percent, 1.48 percent and 0.9 percent, respectively. However, it was Tata Consultancy Services that recorded a significant advancement of 5.71
Auto sector was also on the losing streak as Mahindra & Mahindra and Maruti shares fell 0.36 percent and 1.27 percent, respectively. Similar is the case with regard to Metal and Power sectors. Hindalco dropped 3.26 percent, whereas NTPC and Tata Power fell 5.58 percent and 5.41 percent, respectively. However, the worst performers are Sterlite Industries and Bharat Heavy Electricals that plummeted 9.56 percent and 7.48 percent, respectively, while Oil and Natural Gas Commission edged down by 5.72 percent.
For the week ended February, foreign institutional investors or FIIs have pumped in $3.04 billion into the Indian equities market, while it was $3.23 billion for February. The domestic mutual funds are net sellers to the tune of Rs.13.36 billion until Thursday. This clearly suggests that the markets loss has been limited by continuous FIIs buying.
Given the continued negative trend in the last over six trading sessions, the market seems to be clearly in the grip of bears. The markets could turn around only if any favorable catalyst emerges. (Global India Newswire - AmericanBazaarOnline.com)
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