Recording gains on three of the five sessions, amid high volatility at times, the Indian stock market ended moderately higher last week (July 1 - 5, 2013). While disappointing reports on India's services sector activity, a weakening rupee, some weak sales numbers from automobile manufacturers and concerns over political unrest in Egypt and Portugal hurt sentiment, encouraging news on the monsoon front, a recovery in global markets and a bit of bargain hunting pulled the market out of lower levels.
While the BSE benchmark Sensex ended the week with a gain of around 100 points or 0.5% at 19,496, the broader 50-stock Nifty index of the National Stock Exchange closed higher by about 26 points or 0.4% at 5868. The BSE Midcap and Smallcap indices gained around 0.5% and 0.9%, respectively.
According to the weather office, monsoon rains were 4% above average in the week ended 3 July 2013. Monsoon rains were 27% abovenormal in first five weeks of the season.
The market started the week on a positive note with a firm trend in European markets aiding sentiment. The Sensex ended the session with a gain of around 182 points, while the Nifty moved up 57 points.
On Tuesday, weakness in European markets and profit taking after three successive days of gains took a toll of some front line stocks and dragged the key indices Sensex and Nifty down to a negative close.
Worries about near term economic outlook following a significant drop in core sector growth in April and uncertainty about near term outlook for the European economy rendered the mood a bit bearish. Some disappointing sales data from automobile manufacturers too weighed on sentiment to an extent. The Sensex ended the day with a loss of 114 points, while the Nifty closed lower by around 41 points.
A sell-off in global markets amid concerns about the global economy following the political unrest in Portugal and weak economic data from China, a disappointing report on India's serices sector activity and the sliding rupee, rendered the mood bearish and pushed Indian stocks down to a weak close on Wednesday. The Sensex lost about 286 points and the Nifty declined by around 87 points that day.
The market opened on a bright note on strong cues from Asian peers on Thursday, and surged higher as the session progressed, following a fairly impressive show by the European markets. Hectic bargain hunting and short-covering after two successive days of sharp losses and the rupee's modest recovery against the greenback aided the rally. While the Sensex spurted 233 points on that session, the Nifty ended with a gain of around 66 points.
After opening on a buoyant note, stocks gave up some gains during the final hour on Friday and eventually ended moderately higher. A sharp rally in European markets on Thursday following the European Central Bank and the Bank of England pledging to keep interest rates low for an extended period to support growth, triggered some hectic buying in markets across Asia and set up a firm start for the Indian bourses as well. However, investors cut down positions towards the end of the session, tracking a slightly subdued trend in Europe ahead of key U.S. payroll data. The Sensex notched up a gain of 85 points and the Nifty moved up 31 points in that sesson.
Among the top gainers in the Sensex last week, FMCG heavyweight ITC moved up nearly 5.5%. Hindustan Unilever, which had a couple of impressive outings and hit a record high on the final session, ended the week with a gain of l little over 4%. On Thursday, Hindustan Unilever's parent Unilever PLC announced that shareholders of HUL tendered 31.96 crore shares during the tender period for the open offer which commenced on 21 June 2013 and closed on 4 July 2013. Based on the shares tendered, which represent 14.8% of HUL, Unilever increased its stake in HUL from 52.48% to 67.28%.
Among automobile stocks, Tata Motors surged up 5.3%, despite the company reporting an 18% drop in Tata commercial and passenger vehicles sales. Domestic sales of Tata commercial and passenger vehicles declined 16.40% to 48,712 units in June 2013 over June 2012 and exports declined 34.17% to 3,996 units in June 2013 over June 2012, the company said.
Maruti Suzuki ended modestly higher despite reporting a 12.6% decline in vehicles sales in June 2013, and Mahindra & Mahindra edged up marginally after it said domestic tractor sales rose 19% in June. Hero Motocorp and Bajaj Auto ended lower by 1% and 2.3%, respectively. Hero Motocorp and Bajaj Auto reported lower sales for June.
ONGC ended lower by over 4%. Tata Steel, Coal India, State Bank of India, ICICI Bank and Infosys also closed notably lower.
After seeing some weak spells following a rating downgrade by Moody's Investors Service, Tata Power bounced back to end the week with a modest gain.
Jindal Steel & Power, which saw some heavy selling in the previous week, rebounded and moved up by over 3%. GAIL India, Cipla, Sun Pharmaceutical Industries, BHEL and index heavyweight Reliance Industries also closed with impressive gains.
According to a survey by Markit Economics, Indian services firms lost momentum in June as new business trickled in at the slowest pace in nearly two years, dashing hopes of a sustained pick-up in economic growth. The HSBC Markit Services Purchasing Managers' Index fell to 51.7 in June from May's three-month high of 53.6.
Amid worries about a disruption in supply due to escalating political crisis in Egypt, oil prices rose sharply last week. In the currency market, the partially convertible Indian rupee, which bounced back after hitting a new low of 60.76 on 26 June 2013, breached the 60 a dollar mark again on 3 July, and on Friday, tumbled to 60.59 before closing at 60.23, losing about 1.4% in the week.