Gains recorded in January wiped out.
By R. Chandrasekaran
CHENNAI: Indian stock markets failed to hold on to the gains in the week ended April 5 following a slender gain recorded in the holiday shortened previous week. The absence of catalyst failed to provide any directions or clues to the market. On the contrary, worries over growth and the earlier elections to Parliament prevented investors from taking any fresh positions.
After the Bombay Stock Exchange’s 30-share barometer suffered a loss of 3.04 percent or 590.94 points in the March quarter, investors are hoping for a fresh buying support from both the domestic as well as foreign investors. However, the losses were extended further and closed with a loss of 975.94 points or 5.02 percent so far in 2013. All the gains recorded in January were not only wiped out, but the Sensex also slipped into losses.
At a time when the market was expecting some favorable news to lift investors’ sentiments, the stock markets were greeted by an unfavorable private survey indicating services sector growth hitting a 17-month low in March. The much expected speech of Congress vice president and prime ministerial candidate for next year Parliament elections Rahul Gandhi at the Confederation of Indian Industry also failed to impress the market sentiments.
Among the major news to hit Indian stock markets during the week included patent war over drugs spill over to chronic ailments such as diabetes; Reserve Bank of India is likely to announce new norms for credit cooperatives; government to ease guidelines for exporters; IT companies worried over lack of entry-level talent; private equity investments drop by half in Q1; SEBI drops charges against 3 in Maytas infrastructure case; Gas Authority of India buys capacity in the US gas terminal; reduced air fares fail to push domestic air travel; car sales plummet in March in a decade; RBI offers flexible work timings to its officers; King Fisher Airlines seek stay from the Court as banks sell pledged shares as part of recovery; Ambani brothers strike a deal on sharing of telecom infrastructure; Reliance pack from both the Ambani groups gain after the deal; Sun Pharma drags Glenmark Pharmaceuticals to court; mutual funds gain about 19 percent in assets in the year ended March 2013 due to significant rise in debt and short-term fund plans; banks resort to opening one-man branches; Air Asia India to start hiring for operations in Chennai; HCL to launch tech hub for US schools; government committed to achieve fiscal deficit target; auto companies feel Indian production units are best globally; Zuari Agro won’t go hostile for Mangalore Chemicals and Fertilisers; government floats Rs.20 billion pool to cover Iran oil; global B-Schools chart emerging market course; State Bank of India sees 30 percent home loan growth in 2013; share repurchase program fails to interest investors as market price rules higher; Neyveli Lignite Corporation pulls out of Tamil Nadu power project; and Rahul Gandhi delivers India Inc. a lecture.
In the week ended April 5, the BSE’s Sensex shed 385.54 points or 2.05 percent to close the week at 18,450.23 points, while the National Stock Exchange’s Nifty dropped 129.3 points or 2.28 percent to end the week at 5553.25 points.
The markets closed in the red in three out of the five trading sessions. Of the 30 Sensex shares, 9 stocks advanced and 21 ended in the negative territory during the week.
Reliance pack was in the limelight after the Ambani brothers struck a deal on telecom infrastructure sharing. Reliance Industries, an index heavyweight, advanced 0.86 percent, while Anil Ambani controlled Reliance Communications jumped over 14 percent and Reliance Infrastructure edged up by 1.63 percent.
In the IT segment, it was a mixed bag of fortunes. While Infosys and TCS slipped 0.9 percent and 4.57 percent, respectively, Wipro advanced 4.03 percent. Automobile stocks are under pressure after a poor March sales. Tata Motors dropped 5.2 percent, whereas Mahindra & Mahindra shed 2.71 percent. However, Maruti Suzuki gained 9.87 percent for different reason, i.e. on the hopes of a weaker yen that had a potential for margins improvements. Two-wheeler makers Hero MotoCorp and Bajaj Auto plummeted 4.11 percent and 5.46 percent, respectively.
Banking shares too lost its sheen as SBI, ICICI Bank and HDFC Bank shed 0.79 percent, 4.53 percent, and 0.46 percent, respectively. Home lender HDFC also dropped 6.88 percent during the week. Telecom company Bharti Airtel slipped 7.25 percent, while Tata Power edged down by 1.3 percent.
However, ONGC, Cipla and Sun Pharmaceuticals advanced 0.83 percent, 1.72 percent and 5.04 percent, respectively, in the Sensex pack.
As per the available data, foreign institutional investors remained net buyers of $117.75 million despite selling $114.28 million in April. On the other hand, domestic funds are continued to be a net sellers to the tune of Rs.150 million until April 3.
The market will continue to be directionless in the coming week too in the absence of any favorable catalyst to lift investors’ sentiments.