Key indices posted their first weekly loss this calendar after seven successive weeks of gains, as the market looks to consolidate the massive gains made so far. The Nifty and Sensex retreated 2-2.5%, closing at 5429, and 17923 respectively. Second line shares felt the heat of the sell-off, with the mid cap and small cap indices declining around 4% each.
Sentiment has improved considerably, but valuations are no longer as attractive as they were till a couple of months, say market players. Any upmove from hereon is likely to be selective, as players scour for stocks with which still have some upside left, or are better placed to withstand any sudden correction. Realty, capital goods and banking shares were among the worst performing sectors for the week.
Here is a glance at the 10 events/data/policy that move the market during the week.
Greece bail out package: After much haggling, the European Union finally handed over Greece its second tranche of financial aid, 130 billion euros. But doubts persist on whether the ailing Eurozone member will be able to meet the stiff austerity targets the lenders have set for it.
Kingfisher 's woes: Matters at the ailing airline took a turn for the worse this week, and it looks like nothing short of a miracle can save Vijay Mallya's dream project. Bankers are refusing further loans, the I-T department has frozen the company's bank accounts for non-payment of service tax, oil firms are insisting on upfront payment for fuel, pilots have quit en masse, and the company has cut both fleet and daily flights by more than half.
Sterlite - Sesa Goa merger: Both stocks had a rough week. Sterlite, because the restructuring at flagship Vedana Resources Plc means the debt in group company Cairn will be shifted to Sterlite's books. Sesa Goa shares tumbled after the I-T department disapproved of Rs 246 crore of tax deductions for three of its export units.
PMEAC's rosy outlook: The Prime Minister's Economic Advisory Council has painted a hopeful picture of the economy for FY12-13, pegging GDP growth rate between 7.5-8.0%, and inflation between 5-6%. But many economists see it as too good to be true, given more populist polices in the offing. Besides, high growth and low inflation at the same time appears a tall order.
State Bank of India : The stock fell nearly 9% during the week on concerns over its rising non-performing loans, and hurt sentiment for the banking sector as a whole.
Citi sells HDFC stake: Citigroup sold its entire 9.85% stake in Housing Development Finance Corporation (HDFC) at Rs 658 per share. The price at which the deal was done-a discount to market price-disappointed investors, more so because this is the second major institutional investors to reduce exposure to the company in less than a month.
Runaway crude prices: Tension in Middle-East over Iran's aggressive nuclear stance pushed crude oil prices to near 10-month highs of USD 106 and USD 123. Bad news for India, whose oil import bill has already surged over 40% for the nine-months ended December, widening an already huge current account deficit and putting further pressure on the rupee.
New CPI-based inflation: The first inflation reading based on the revamped Consumer Price Index at 7.65% has somewhat dampened hopes of a rate cut by the RBI at its policy review meet on March 15. The reading shows a sharp increase in the cost of services, something not factored in the Wholesale Price Index.
Dow hits 13,000: ...for the first time since May 2008, just before the financial crisis broke out.
MCX IPO: The Rs 650 crore-issue was subscribed 53 times, reflecting a strong appetite for quality issues, as well the improved outlook on the market. But too much money flowing in that direction caused a temporary liquidity crunch of sorts in the secondary market, and contributed to the weakness.
Proposed priority sector lending norms: An RBI committee has recommended changes for priority sector lending, which could make things slightly tough for banks on the balance, while making things quite tough for non-banking finance companies, especially those into asset financing, and also for private banks
Source: Money Control
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