Bulls paused for a
breather after a strong run for over the last four weeks, which pushed
up indices 7.5 percent in anticipation of improving macro-environment
and a stable government after the elections.
The 30-share BSE Sensex shed 109.99 points or 0.5 percent during the
week to close at 21809.80 after hitting record high of 22023.98.
The 50-share NSE Nifty touched life high of 6562.85 before closing the
week 6504.20, 22.45 points or 0.3 percent compared previous week’s
closing.
Consistent fall in inflation during first two months of 2014 and an
expansion in industrial output in January for the first time in four
months supported the market. But concerns over fresh tensions in Crimea
and a slowing Chinese economy limited upsides.
It was a consolidation week for the market after record highs and that
may continue for some more time, experts feel. But most of them think
the pre-election rally is not over yet and advise buying on every dip
ahead of general elections.
KR Bharat, MD, Advent Advisors said the upward momentum was unlikely to
fizzle out anytime soon, and the market could ignore economic realities
in India and overseas and also the geopolitical realities, for a while.
According to him, the market has also discounted a stable government and
is now in the process of discounting some of the likely policy
initiatives as well.
In economic data, February CPI inflation slipped to 25-month low at 8.1
percent (from 8.79 percent in January), which is close to RBI’s comfort
level of 8 percent. It has raised hopes that the RBI may not hike policy
rates at its next meeting on April 1.
WPI inflation softened to a nine-month low at 4.68 percent in February
as against 5.05 percent in previous month supported by fall in vegetable
prices.
January industrial output grew 0.1 percent compared to contraction of
0.2 percent in earlier month but consumer goods, capital goods and
manufacturing remained in the negative domain.
BSE Healthcare, Metal and IT indices were hit hard, falling 1.7 percent,
4.82 percent and 6 percent, respectively.
However, the Capital Goods index gained the most, rising 3.5 percent
followed by Bank, Realty, Oil & Gas and FMCG with 1-2 percent.
Infosys was the biggest loser, shedding 9 percent after chairman
Narayana Murthy sounded caution on the company’s growth . The management
in Barclays investor conference said that revenue growth for FY14 was
likely to be at the lower end of its guidance (11.5-12 percent).
Brokerage house Deutsche Bank cut target price on the stock to Rs 3,600
from Rs 3,800. This had a ripple effect on other IT majors like TCS and
HCL Technologies, which fell 4-5 percent.
Metal shares weakened on poor Chinese trade data. Copper prices hit the
lowest since July 2010 while iron ore prices touched more than 1.5-year
lows during the week, which caused Sesa Sterlite, Hindalco Industries
and Tata Steel to lose around 8 percent.
Ranbaxy Labs fell over 7 percent as Supreme Court on Friday issued
notice to company on following a PIL that the company was selling
adulterated cholesterol lowering drugs in the country. The company,
which is already facing manufacturing quality concerns, has recalled
more than 64,000 bottles of cholesterol lowering drug in the US.
Sun Pharma was the latest company in import alert list. It received
import alert on its Karkhadi unit in Gujarat. The stock fell 5 percent
though the company said the contribution of this unit to company’s
revenue is negligible. In another blow, the drug maker recalled one
batch of subsidiary’s Glumetza generic, according to sources.
Commercial vehicle maker Tata Motors slipped 4 percent on consistent
worries over its domestic automotive business but Jaguar Land Rover
continued to help its global business, with sales growing 14 percent in
February.
Axis Bank declined over 3.5 percent. Divestment secretary on Friday said
the government would raise Rs 3,000-4,000 crore via SUUTI stake sale in
Axis Bank by March-end, reports CNBC-TV18 quoting Reuters.
However, engineering and construction major Larsen & Toubro climbed
nearly 5 percent as the company received an order worth Rs 3,655 crore
for mega-road project in Qatar.
Oil marketing company BPCL rallied over 6 percent on source-based
reports that the government will reimburse under-recoveries next week.
Tata Power gained 5 percent after the Appellate Tribunal of Electricity
(ATE) asked the Delhi Electricity Regulatory Commission (DERC) and
private power distribution companies in the city to lay out a roadmap
for liquidation of “regulatory assets” worth up to Rs 8,000 crore.
Among others, IDFC, Kotak Mahindra Bank, Hero Motocorp, IndusInd Bank
and Mahindra & Mahindra were up 4-8 percent.
The rally in banks was also after brokerage house Morgan Stanley
upgraded financials to attractive from in-line with the raising ICICI
Bank's target price to Rs 1,500 apiece from Rs 1,225 and HDFC Bank's
target to Rs 1,000 from Rs 875.
In the corporate developments, sources said the government raised Rs
5,340 crore through stake sale in IOC today. ONGC and Oil India bought 5
percent stake each in IOC.
L&T Finance Holdings’ offer for sale issue fully subscribed, but was
priced at a steep discount to market price. The company was also
included in NSE F&O segment from Thursday.
Top car maker Maruti Suzuki has sent a clarification to market regulator
Securities and Exchange Board of India (SEBI) over the recent decision
to have its parent Suzuki Motor Corporation set up a manufacturing plant
in Gujarat, reports CNBC-TV18 quoting sources.
Among midcaps, HCL Infosystems, Coromandel Engineering, Adhunik
Metaliks, Dalmia Bharat, Gati, Ceat, Engineers India, BEML and JK Tyre
surged 12-36 percent.
For the week ahead, investors will closely watch Sunday’s referendum in
Crimea and FOMC meeting on March 18-19.
Read more at: h
