Weekly Market Outlook - SNAPSHOT - By Mansukh - 23July 2011

SNAPSHOT

Indian equity markets, which failed to extend the winning momentum last week, resumed the northward journey by settling with close to a percent gains in the week ended July 22. The enthralling week saw the frontline indices being buttressed not only by encouraging reports from the domestic front but also by easing concerns over global financial stability. The Bombay Stock Exchange (BSE) Sensex gained 160.38 points or 0.86% to 18722.30 during the week ended July 22, 2011. The BSE Mid-cap index was up by 39.37 points or 0.56% to 7046.12 and the Small-cap index was up by 100.27 points or 1.20% to 8463.49.  The S&P CNX Nifty gained 52.85 points or 0.95% to 5633.95. On the National Stock Exchange(NSE), Bank Nifty increased by 57.40 points or 0.51% to 11291.95, CNX IT surged 92.45 points or 1.46% to 6438.50 while CNX mid-cap lost 21.30 points or 0.26% to 8153.90 and CNX Nifty Junior slipped 111.70 points or 0.98% to 11278.45. India's food inflation has once again resumed its declining trajectory as the Food Articles group rose 7.58% in the week ended July 9 compared to 8.31% in the previous week. The Empowered Group of Minister (EGoM) on food headed by Finance Minister Pranab Mukherjee removed the four year ban from export export of wheat.

Meanwhile, Indian agriculture production registered a record increase of around 11% during the 2010-11 agriculture season while ministry of finance approved 31 foreign direct investment (FDI) proposals worth Rs 3844.70 core. The domestic indices were largely influenced by the encouraging developments from the Euro-zone where European Union leaders carved out a second bailout package worth 109 billion euros ($157 billion) for debt-stricken Greece in a desperate effort to contain the 18 month long debt crisis in Europe, which is threatening to spread to much larger economies.

Weekly Market Outlook - SNAPSHOT - By Mansukh - 16July 2011

SNAPSHOT

Indian benchmark indices failed to extend the winning run for the fourth straight week and halted the weekly uptrend with around one and half a percent losses. The eventful week saw the frontline indices being tormented not only because of domestic reasons but also by worsening global financial situation. The markets got off to a subdued opening for the week as last Friday's pessimism got spilled into Monday's session. What unfolded in the next couple of days was a nasty cut of over one and half a percent followed by a recuperation of around a percentage points. The bourses were destined for similar fortune in the next two days as well but the magnitude of gains and losses was moderate. Then came the extremely disappointing IIP numbers for the month of May which unexpectedly slowed to 5.6% from a year earlier, confirming the signs that the economy is losing steam after a string of interest rate hikes by RBI. Meanwhile, monthly WPI inflation numbers released by the government gave some respite to the markets as it increased to 9.44% in June against 9.06% in the previous month, whereas economists had forecast a gloomier picture and a sharper rise to 9.7% because of the recent hike in prices of petroleum products by the government.
However, the relief proved temporary as weak monsoon data took its toll on sentiments. The Bombay Stock Exchange (BSE) Sensex lost 296.12 points or 1.57% to 18561.92 during the week ended July 15, 2011. The BSE Mid- cap index gained marginally by 10.44 points or 0.15% to 7006.75 and the Small-cap index lost 11.92 points or 0.14% to 8363.22. The S&P CNX Nifty declined by 79.55 points or 1.41% to 5581.10. On the National Stock Exchange (NSE), Bank Nifty lost 50.60 points or 0.45% to 11234.55, CNX IT slipped 377.80 points or 5.62% to 6346.05 while CNX mid- cap increased by 59.30 points or 0.73% to 8175.20 and CNX Nifty Junior gained 33.40 points or 0.29% to 11390.15.

Weekly Market Outlook - SNAPSHOT - By Mansukh - 2nd July 2011


SNAPSHOT

Boisterous Indian benchmarks witnessed an awe-inspiring week of trade as they carried forward their exhilaration from the previous week and vivaciously rallied over 1,250 (Sensex) and 350 (Nifty) points from last Thursday to this Thursday. However, the frontline indices receded on Friday, halting a six-day advance, as some investors judged the recent rally as excessive and resorted to profit booking on speculations that fundamentally things have not changed much and also on expectations that Reserve Bank of India would continue its tightening measures until there are clear signs of inflation easing. Nevertheless, the frontline indices accumulated around three percent points for the week, the largest weekly gain since late March as optimistic global cues coupled with encouraging local developments fortified investors' mood. Foreign institutional investors showed renewed vigor in Indian equities following the government's decision to hike prices of petroleum products while the reduction in customs and excise duty came as an incremental positive surprise for them. The net FII inflow in the equity stood at over Rs 4,600 crore till Thursday.


The core infrastructure industries registered a slowdown in the pace of growth in the month of May, coming down at 5.3% compared to 7.4% registered in May 2010, mainly due to increased interest rates and confusion on policies. The RBI has raised interest rates 10 times since March 2010 to tame inflationary pressures and has made its intention clear to sacrifice some growth to calm inflation. The food inflation numbers showed signs of cooling in the week ended June 18, According to the data released by Ministry of Commerce and Industry, the index for Food Articles group rose to 7.78% for the week-ended June 18, from 9.13% for the previous week.