Worries about escalating tension in Iraq, rising crude oil prices and a downward revision in global growth outlook by the World Bank dragged down stocks on the Indian bourses during the week ended 13 June 2014.
The BSE benchmark Sensex ended the week with a loss of 168.29 points or 0.66% at 25,228.17, while the broader 50-stock Nifty index of the National Stock Exchange closed down 41.30 points or 0.54% at 7542.10.
During the week, the Sensex and the Nifty scaled new all-time highs at 25,725.12 and 7700.05, respectively. The indices hit those marks on Wednesday (June 11, 2014).
Despite seeing some hectic buying during the earlier part of the week, midcap and smallcap stocks lost notable ground last week. While the BSE Midcap index declined by about 1.8%, the Smallcap barometer ended lower by a little over 1%.
It was a fairly good start for the market last week with investors lapping up stocks, amid hopes the government will push reforms. A firm trend in global markets too aided sentiment that day. The Sensex ended the day with a gain of about 184 points at a record high. The Nifty gained 71.20 points.
After a choppy ride, the key indices ended slightly up on Tuesday. Movements were quite sluggish on Wednesday as well, with investors looking for direction. However, the Sensex ended with a pronounced loss of 110 points that day, while the Nifty closed lower by 29.55 points.
The market regained lost ground on Thursday and recorded a new closing high, with the Sensex finishing with a gain of over 100 points. The Nifty closed up 23.05 points.
Heavy selling almost across the board pushed the key indices down sharply on Friday. With mounting tension in Iraq pushing the Brent crude up past the $114 a barrel mark, the mood across global markets turned quite bearish and stocks took a fairly severe beating. The Sensex ended nearly 350 points down, while the Nifty decilned by 108 points.
ONGC, which had some bright spells in positive territory earlier in the week amid talks of a gas price hike, ended the week with a loss of nearly 9%. Reliance Industries declined by about 3.5%.
Shares of oil marketing firms BPCL, Hindustan Petroleum Corporation and Indian Oil Corporation declined sharply after crude oil prices climbed.
Power stocks, led by NTPC (down over 7%) and Tata power (down 6.5%), saw some heavy selling during the latter part of the week.
Bank stocks declined on selling pressure. Among sector heavyweights State Bank of India, ICICI Bank and Axis Bank lost 4.5%, 3.5% and 7.8%, respectively. HDFC Bank bucked the trend and ended stronger by over 2.5%.
During the earlier part of the week, shares of SBI's associates State Bank of Bikaner & Jaipur, State Bank of Travancore and State Bank of Mysore saw some hectic buying amid speculation that the PSU giant is considering merging these entities with itself. Later in the week, State Bank of Inida clarified that no such proposal has been taken up for approval as of now.
Telecom stock Bharti Airtel ended lower by over 6%. Among healthcare stocks, Dr Reddy's Laboratories, Sun Pharmaceutical Industries and Cipla rose sharply, gaining over 4% for the week.
Information technology stocks Tata Consultancy Services (6.3%), Infosys (6%) and Wipro (4.2%) gained in strength after the rupee lost ground against the greenback.
In a significant move, Infosys announced the appointment of Dr Vishal Kakka as the new CEO & Managing Director. Kakka will take over the mantle from SD Shibulal on August 1, 2014. Infosys also said that Mr. N.R. Narayana Murthy will voluntarily step down as Executive Chairman of the company on 14 June 2014.
Metal stocks tumbled, with big names such as Sesa Sterlite, Tata Steel and Hindalco losting 4% - 6%.
Shares of PSU power equipment maker BHEL ended lower by over 9%. Among automobile stocks, Bajaj Auto gained nearly 6%, while Hero Motocorp lost 3.5%.
The World Bank lowered global growth outlook for this year to 2.8% from an earlier estimate for an expansion of 3.5%, citing slower pace of recovery in Chinese, Russian and the U.S. economies. The World Bank lowered its outlook for the Indian economy as well for this financial year.
According to the data released by the government after trading hours on Thursday (12 June), India's industrial production was up 3.48% in April, against a contraction of 0.5 a month earlier. Meanwhile, inflation based on consumer price index for urban and rural India declined to 8.28% in May. In April, the consumer price inflation came in at 8.59%.
India's merchandise exports climbed 12.4% to $28 billion May, compared to the same month last year. Imports declined 11.41% to $39.23 billion. Trade deficit narrowed to $11.23 billion in May 2014, down from $19.37 billion in May 2013.