Weekly Wrap: Sensex, Nifty end flat on weak economic data

Last Updated: Sat, Apr 19, 2014 05:48 hrs

It was a flat close for Indian stock indices Sensex and the Nifty last week, a truncated one due to holidays on Monday (April 14) and Friday (April 18) for Dr Ambedkar Jayanti and Good Friday, respectively.

Recording losses on two of the three sessions, the Sensex ended the week at 22,682.84, down slightly from previous week's close. The Nifty ended up 3.10 points at 6779.40. Midcap and smallcap stocks too closed mostly flat, unable to hold at higher levels.

While weak industrial production and inflation data weighed down the market, strong results from IT majors Tata Consultancy Services and HCL Technologies lifted sentiment.

The market started the week on a weak note, with disappointing industrial output data and high inflation triggering a sell-off at several counters.

Even as the broad market traded weak, stocks from information technology sector had a good outing on Tuesday, thanks to better than expected results from bellwether Infosys.

The Sensex ended the day with a loss of around 144 points or 0.6%, while the Nifty closed down 43.20 points or 0.6%.

Infosys reported a net profit of Rs 2992 crore for the quarter ended March 2014, up 4% from the quarter ended December 2013. However, the company's revenues declined 1.15% to Rs 12,875 crore for the quarter ended March 2014, from the previous quarter.

Infosys expects its consolidated revenues to grow 5.6% - 7.6% for the fiscal year ending 31 March 2015. In dollar terms the company expects its consolidated revenues to grow 7% - 9% for the fiscal year ending 31 March 2015.

On Wednesday, the market ended lower, extending losses to a third successive session, as foreign institutional investors pressed sales on the back of weak industrial output and inflation reports. A weak report on Chinese GDP growth and caution ahead of key results contributed as well to the market's sharp decline.

The Sensex ended the session with a loss of 208 points or 0.9%, while the Nifty closed lower by about 58 points or 0.9%.

Stocks bounced back strongly on Thursday, as investors switched back to buying mode amid expectations of a business friendly government post the ongoing Lok Sabha polls, a likely upgrade in India's investment rating by Standard & Poor's and on strong results from IT majors.

Snapping a three-session losing streak, the Sensex ended with a gain of 352 points or 1.6%, while the Nifty closed up 104 points or 1.6%.

Tata Consultancy Services came back strongly after early weakness and ended higher by a little over 1%. The IT major's net profit was up 0.5% to Rs 5358 crore on 1.2% growth in revenue to Rs 21,551 crore for the quarter ended March 2014, from the previous quarter. On the year, profit rose 48.2%.

For the year ended 31 March 2014, Tata Consultancy Services' profit was up 37.7% at 19,164, from the previous financial year.

HCL Technologies reported consolidated net income (per US GAAP) of Rs 1624 crore for the quarter ended March 2014, up 8.5% from the previous corresponding quarter.

Reliance Industries gained modest ground ahead of quarterly results. ITC notched up a gain of 2.7%. ONGC and Bharti Airtel gained 0.7% and 1%, respectively.

HDFC declined by about 4%. Despite seeing some strong buying at times, power stocks failed to retain gains. Tata Power and NTPC lost about 3% and 1.2%, respectively.

Metal stocks were a bit listless amid concerns about Chinese economy. Tata Steel edged down marginally and Sesa Sterlite lost over 1.5%, while Hindalco posted a modest gain.

IT majors Infosys, Tata Consultancy Services and Wipro posted notable gains last week.

Among bank stocks, Axis Bank and HDFC Bank closed lower by over 2%. State Bank of India ended 1.2% up.

Among automobile stocks, Tata Motors moved up 1.3%. Tata Motors said wholesales including Jaguar Land Rover declined nearly 18% in March 2014, as compared to the same month last year. Global wholesales of Jaguar Land Rover rose 1.47% to 43,311 units in March 2014 over March 2013.

Maruti Suzuki and Bajaj Auto posted modest gains and Hero Motocorp ended stronger by over 2%, while Mahindra & Mahindra closed weak.

Pharma majors Dr Reddy's Laboratories, Sun Pharmaceutical Industries and Cipla closed marginally lower.

Capital goods stocks, including sector heavyweights Larsen & Toubro (down 2%) and BHEL (down 2.1%) saw some weak spells during the week.

Realty stocks declined amid fading expectations of a rate cut due to a rise in wholesale price inflation.

United Spirits soared nearly 12% that day after Diageo Plc made an offer to acquire an additional 26% stake in United Spirits at price of Rs 3,030. Diageo currently holds 28.8% in United Spirits. United Breweries (Holdings) Limited shares gained more than 18%.

On the economic front, the data released by the government after trading hours on Friday (11 April 2014) showed that the country's industrial production declined unexpectedly by 1.9% in February due to the weakness in manufacturing sector. Analysts were expecting February industrial output to see a nearly 1%.

Manufacturing output declined 3.7% in February (year-on-year), while electricity and mining sectors rose 11.5% and 1.4%, respectively.

According to the data released by the government on Tuesday (15 April 2014), wholesale prices-based inflation accelerated to a three-month high of 5.70% in March, driven up by increases in food and fuel costs. In February, wholesale prices rose 4.68%, their slowest pace in nine months. Foos prices rose 9.90% year-on-year last month, faster than an annual rise of 8.12% in February.

The government revised the reading for January WPI inflation to 5.17% from 5.05% earlier.

A report released after tradinger hours on Tuesday showed the general consumer prices index for urban and rural India to have risen to 8.31% (provisional) in March, from 8.03% in the previous month. Core CPI inflation which excludes food and fuel prices eased to 7.82% in March 2014, from 7.84% in February 2014.

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