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Weekly wrap: Sensex, Nifty consolidate; DIIs ditch D-St

17:38

The week ended November 14 saw Nifty and Sensex eke out 0.7-0.8 percent gains amidst consolidation at higher levels.

Both indices continued to smash previous records all through the week and ended the week at all-time high levels; BSE Sensex breached the 28,000 figure for first time ever.

The mid-cap and small-cap stocks stole a march over Sensex and Nifty’s tepid gains. The BSE small-cap index was up 1 percent and CNX mid-cap swelled 1.7 percent.

Top performing mid-cap and small-cap stocks that gave investors reasons to smile this week were: Subex, Jindal Saw, Hotel Leela, Ashol Leyland and Balrampur Chini which rallied between 15-55 percent.

Amongst blue chips, which are considered relatively safe over a long investment period, top weekly gainers were:  DLF, BoB, Bajaj Auto, ITC and Asian Paints which swelled between 4-6 percent on the bourses.

Amongst frontline losers, Cipla, ONGC, BPCL, Cairn, Sesa Sterlite & Kotak Mahindra Bank fell 2.5-6 percent.

A swathe of upbeat macro-economic numbers released during the week failed to cheer domestic investors, who chose to take some cash off the table. So far this month, domestic Institutional investors (DIIs) have net sold stocks worth Rs 4,709 crore after buying Rs 4,102.87 crore worth of equities in October.

Inflation based on the Consumer Price Index (CPI) or retail inflation for the month of October eased to 5.52 percent, the lowest since India started computing consumer price index (CPI) in January 2012, triggered by lower food prices and fuel costs.

Meanwhile, the index for industrial output (IIP) for the month of September came in at 2.5 percent beating street estimate of 2 percent, against 0.4 percent in August. Furthermore, the August IIP has been upwardly revised from 0.4 percent to 0.5 percent.

Owing to reduced inflation and depressed industrial output, Dalal Streeters are now making a case for a rate cut.

This may not happen soon, suggests a CRISIL report. “We believe that the RBI would wait till there are clear indications that the fall in inflation will be sustained, before beginning to lower repo rate. In fact, excluding vegetable prices, retail inflation in October fell to 6.1 percent. We also believe that a rate cut will yield little return in terms of higher investment as the root cause for slowing investments have been policy uncertainties and slowing demand in the economy.”

The wholesale price index rose 1.77 percent last month, its slowest since September 2009.

Meanwhile, Foreign portfolio investors (FPIs) continued to invested heavily in Indian stocks which has outperformed all others in 2014 (on a year-to-date basis) . FPIs have invested Rs 6,923.90 crore in Indian equities so far in the month of November as compared to meager Rs 892.35 crore last month. The sentiment turned positive after Bank of Japan’s committed to increase the pace of its quantitative easing and US Federal Reserve stated that it will keep interest rates at record low levels for a ‘considerable time’.

Market Internals

BSE FMCG index hoisted 3 percent, leading the sectoral indices on the BSE. Other notable gainers were BSE Auto, Bank Nifty, Realty and Consumer Durables which gained between 1.7-2 percent.

Public lender State Bank of India posted second quarter net profit at Rs 3100 crore versus a CNBC-TV18 poll of Rs 3096 crore. Gross NPA fell marginally to 4.89 percent versus 4.90 percent quarter-on-quarter, while net NPA stood at 2.73 percent versus 2.66 percent Q-o-Q. The stock was up 0.2 percent this week.

Tata Motors stock slid 2 percent this week, ahead of its disappointing September quarter earning numbers which were released post market hours on Friday. The automobile maker’s consolidated net profit of Rs 3,291 crore, down 7 percent from the year-ago figure of Rs 3,542 crore.

BSE Oil & gas slid 2 percent; the government raised the fuel excise duty on diesel and petrol amid sliding global oil prices. BSE Power index was the other losers this week; the mining sector as well as electricity generation growth decelerated to 0.7 percent and 3.9 percent, respectively in September 2014, according to latest IIP data.

BHEL stock slid over 4 percent this week. BHEL on Friday saw its net profit tumble nearly 73 percent to Rs 124.84 crore in three months ended September this year as lower revenues from power and industry segments took a toll on its profitability.

Friday marked the end of the September quarter earnings season and market is now likely to follow global cues, crude oil price trend and FPI investments. 

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