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Weekly: Markets falter on global growth concerns, oil prices woes

The markets showed no signs of respite, trending lower through the week, amid a drastic fall in the rupee, sell-off in Chinese shares and decline in crude oil prices. The market logged declines in four out of five trading sessions in the week.

The 30-share Sensex ended down 3.89% or 1,107.42 points at 27,350.68, while the 50-share Nifty ended down 3.68% or 314.20 points at 8,224.10

Following the tandem, BSE Mid-Cap index slumped 389.69 points or 3.71% to end at 10,108.60 and the BSE Small-Cap index dropped 406.21 points or 3.54% to close at 11,068.48.

Foreign institutional investors were net buyers in Indian equities worth Rs 3,084 crore for the week, as per provisional stock exchange data.

KEY EVENTS THAT SHAPED THE WEEK

A sharp rise in gold imports and a fall in export growth pushed India’s CAD to 2.1% of GDP in the financial year’s second quarter, ending September, compared to 1.2%of GDP for July-September 2013.

China’s economy slowed in November as factory shutdowns exacerbated weaker demand, raising pressure on the central bank to add further stimulus.

Rupee posted its biggest weekly fall in over four months on Friday, tracking steep decline in local shares and broad dollar strength as the drop in crude oil prices raised concerns about the global economy.

Brent crude slipped at $ 62 per barrel and earlier hit a low of $ 61.35—the lowest since July 22, 2009.on concerns over a global supply glut and weak demand.

STOCKS

The BSE Oil & GasIndex was the top loser among the sectoral indices during the week down 7.2% followed by Oil & Gas, Realty, Metal, Power and IT indices.

Oil and gas shares reeled under pressure after global crude oil prices fell to a five-year-low on concerns about supply glut. ONGC, RIL and GAIL shed between 7-10%.

Shares of metal companies fell up to 13% on China slowdown fears. Sesa Sterlite, Tata Steel and Hindalco lost between 6-13%.

IT Major Infosys lost 6.31% after company’s founders N R Narayana Murthy, Nandan Nilekani, K Dinesh and S D Shibulal, along with their families sold a total 3.26 crore shares of the company in bulk deals on the NSE. 

Wipro fell 5.98% after Wipro Inc Benefit Trust sold 18.10 lakh shares of Wipro during at an average market price of Rs 552.43 per share.

TCS, India’s largest information-technology services player, is learnt to be undergoing a restructuring exercise and was down 4.76%.

Financials declined across the exchange. ICICI Bank, Axis Bank, SBI and HDFC twins declined between 1-4%.

On the flip side, Coal India ended up 2.5% after it requested the government to re-allot the two coal blocks in Odisha which it had lost following the Supreme Court’s order to cancel allocation of 214 coal blocks.

Sun Pharma gained 2.5% after CCI approved the proposed merger between Sun Pharma and Ranbaxy, which will result in a combined entity with annual sales worth $ 4.3 billion, making it the fifth-largest generic drug maker globally.

ITC gained 1% and has become the second-most valuable Indian company, surpassing refineries giants- ONGC and RIL in overall m-cap ranking.

KEY EVENTS TO WATCH OUT NEXT WEEK

WPI inflation data for November, corporate advance tax for the third installment of 15 December and developments in the ongoing winter session of parliament are the domestic factors that will be closely watched during the forthcoming week. 

Outcome of the FOMC monetary policy review and snap election in Japan and Greece’s presidential elections, the movement of rupee against the dollar, and crude oil price movement will dictate near term trend on the bourses.

Further, investors will watch out for the market reaction to CPI inflation which cooled to 4.3% for the month of November and the IIP numbers slipped to a three-year low of  -4.2% for the month of October.

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