Amid high volatility following the Reserve Bank of India's decision to hold repo rate unchanged when it unveiled its mid-term monetary policy review on 30 October 2012, the market posted moderate gains for the week ended 2 November 2012.
Quarterly results from India Inc. were not extremely disappointing, but then, they were not any significantly encouraging either. Some strong sales data from automobile manufactuers, sustained buying by foreign institutional investors and a somewhat steady trend in global markets on the back of some upbeat economic data from the U.S., prompted investors to indulge in heavy buying at times.
While the BSE benchmark Sensex ended the week with a gain of around 130 points or 0.7% at 18,756, the broader Nifty index of the National Stock Exchange closed higher by 33 points or 0.6% at 5698. While midcap stocks saw some buying, smallcap stocks were mostly subdued. The BSE Midcap index moved up by about 0.6%, while the Smallcap barometer gained around 0.3%.
According to the data available from the exchanges, FIIs were net buyers to the tune of over Rs 11,350 crore in October 2012, nearly Rs 8000 crore less than the amount brought in by them in September. In the current calendar year (till 31 October), they have bought shares worth a net Rs 93,965 crore.
On Monday, the finance minister P Chidambaram laid a roadmap to put the government's fiscal house in order, stressing the need to control expenses and generate more revenue as it targets budget deficits of 5.3% of gross domestic product this fiscal year and 4.8% next year. The fiscal deficit stood at 5.8% in the year ended 31 March 2012.
On Tuesday (30 October), the Reserve Bank of India left the repo rate unchanged even as it cut Cash Reserve Ratio by 25 basis points to 4.25%. The reduction in CRR will result in an infusion of Rs 17,500 crore into the banking system.
The central bank's decision to raise banks' provisioning requirements to 2.75% from the existing 2%, triggered heavy selling in the banking space that day and hurt overall sentiment to a significant extent.
The apex bank cut fiscal 2013 GDP growth forecast to 5.8% and raised inflation projection for financial year 2013 to 7.5%, raising concerns about the near term outlook for the economy.
According to the data released by the government on Wednesday (31 October), inflation measured by monthly Consumer Price Index Numbers for Industrial Workers eased to 9.14% in September 2012, from 10.31% in August 2012 and 10.06% in September 2011.
On Monday, weakness in global markets amid worries about falling earnings and caution ahead of Reserve Bank of India's monetary policy review on Tuesday rendered the market quite sluggish for a better part of the session. The Sensex, which saw some wild swings during the day, ended the session with a small gain of around 10.50 points. The Nifty closed 1.30 points up.
After a cautious and somewhat listless start on mixed cues from Asian peers, the Indian market faltered and plunged deep down into the red on Tuesday after the Reserve Bank of India left the repo rate unchanged even as it cut Cash Reserve Ratio by 25 basis points to 4.25%. The Sensex ended the day with a loss of 205 points or 1.1%, while teh Nifty closed lower by 68 points or 1.2%.
After a slightly positive start and a subsequent choppy ride that lasted close to four hours, the market saw some hectic buying in the last couple of hours on Wednesday and ended with modest gains. The Sensex ended the day with a gain of 75 points, while the Nifty moved up by about 22 points that day.
The market shrugged off a weak start and a subsequent long spell in negative territory to sign off on a positive note on Thursday. Some impressive results from India Inc and strong sales data from automobile manufacturers Maruti Suzuki and Mahindra & Mahindra lifted sentiment as the session progressed. A fairly steady trend in European markets too contributed to the positive close. While the Sensex ended higher by 56 points, the Nifty surged 25 points in that session.
Some upbeat U.S. economic data, a few better than expected results from India Inc. and strong automobile sales data buoyed up sentiment on Friday, sending the Sensex and Nifty up by 194 points and 53 points, respectively.
Among the top gainers last week, Wipro spurted more than 8.5% thanks to upbeat results. On a consolidated basis under International Financial Reporting Standards, Wipro's net profit rose 24% to Rs 1611 on 17% increase in total revenue to Rs 10657 crore in the July - September 2012 quarter, over the corresponding quarter last year.
Wipro also announced that it will fold all its non-IT businesses into a new company and focus exclusively on information technology, sparking a more than 3% rally in its shares in Mumbai. The new unlisted firm, known as Wipro Enterprises Ltd, will include Wipro's consumer care, medical diagnostics and infrastructure units, Wipro said in a statement to the stock exchanges on Thursday.
Maruti Suzuki moved up by over 7%. The carmaker posted a net profit of Rs 227.45 crore for the quarter ended September 30, 2012 as compared to Rs 240.45 crore for the quarter ended September 30, 2011. Total income increased from Rs 7845.70 crore for the quarter ended September 30, 2011 to Rs 8461.75 crore for the quarter ended September 30, 2012.
Bajaj Auto gained more than 6%, due largely to a sharp surge in vehicles sales in October. Mahindra & Mahindra moved up by around 4.4% on impressive sales data. Hero Motocorp and Tata Motors also ended on a firm note last week, gaining 4% and 3.3%, respectively.
Dr Reddy's Laboratories gained more than 6% last week thanks to strong results. The pharma major said its consolidated profit after tax as per International Financial Reporting Standards jumped 32% to Rs 407.40 crore on 27% growth in revenue to Rs 2880.90 crore in the July - September 2012 quarter, from the prior corresponding period.
Reliance Industries ended the week with a modest gain of 1.2%.
BHEL lost more than 6% on disappointing results. The company reported a net profit of Rs 1274.45 crore for the quarter ended September 30, 2012 as compared to Rs 1412.03 crore for the quarter ended September 30, 2011. Total income decreased from Rs 10,792.75 crore for the quarter ended September 30, 2011 to Rs 10,692.22 crore for the quarter ended September 30, 2012.
According to a survey, India'a manufacturing growth inched up in October from September's 10-month low, supported by a pick up in new orders and an easing of price pressures. The HSBC manufacturing purchasing managers' index, which gauges the business activity of India's factories but not its utilities, nudged up to 52.9 in October from 52.8 in September.
The new orders sub-index, an indicator of future output, edged up to 54.9 last month from 54.4 in September while export orders grew for the second straight month albeit at a slightly slower pace.