It was a poor start to the February series with the Sensex shedding 499 points to close at 2,9183 and the Nifty losing 143 point to close at 8,809.
For the week, a sell-off on the last day of the week led both the Sensex and Nifty to lose 0.3 percent for the week. Broader markets were performed better than benchmarks as Nifty small-cap and mid-cap indices gained between 0.3-0.7 percent.
Bank Nifty which until last week was a star performer among sectors came under selling pressure this week as investors tried to book profits at record high levels.
Losses in public sector banks were greater than the industry in general; CNX PSU Bank index was down 7.7 percent as compared to 1.1 percent downtick in Bank Nify. Realty, consumer durables, FMCG, power, pharma and Oil & gas sectors ended with 1-8 percent uptick. Investors are betting heavily on real estate stocks given cheap valuations and rate cut expectations.
Brokerage house HSBC Securities in an interview with CNCB-TV18 said RBI may cut benchmark rates by another 50 basis points by June this year.
“Strong disinflationary forces from controlled food inflation, weak rural wages, falling commodity prices and low growth have converged to form a potent mix,” said the HSBC note to clients.
During the week, earning numbers for quarter ended December 31, 2104 dominated the headlines.
Bank of Baroda’s Q3 net profit tumbled 62 percent due to one-time income tax payment of Rs 410 crore as well as worsening NPA levels. The ED of the bank assured the entire amount has been provided for in the books of account.
ICICI Bank missed street expectations on Friday with the third quarter net profit rising 14 percent year-on-year to Rs 2,889 crore, aided by other income and net interest income.
Information technology company HCL Tech today announced its Q2 numbers with a net profit of Rs 1915 crore (up 2.3 percent quarter-on-quarter). Ankit Pande of Quant Broking believes the company has posted a stellar set of numbers but that won’t lead to a target price revision just yet
Tech Mahindra beat street expectations on topline and bottomline front on Friday. Consolidated profit jumped 11.9 percent sequentially to Rs 805 crore during Octber-December quarter.
Top Nifty gainers which rallied 4-11 percent during the week were BPCL, HCL Technologies, DLF, Lupin, ITC, BHEL, Axis Bank & Reliance Industries. Kotak Mahindra Bank slipped between 4.5-13.4 percent, to emerge as top Nifty losers.
For all local and international experts who have endorsed the current bull run in India time and again, there is contrarian view too. Sanjay Dutt of Quantum securities believes that market is overbought at current levels. He compares the ongoing rally with the frenzied bull market of 2007-08, and says the recovery in corporate earnings has already been discounted.
“We are a tad overbought, global factors aren’t helping in any manner,” Dutt said in an interview with CNBC-TV18, adding, “so a combination of these should pull the markets back before we take the next leg up and come into that 9,400-9,500 range after we breakout of 9,100-9,000 range.”
Market will have a reason to cheer on Monday as data released post market hours on Friday show that GDP growth for FY 13 was revised ti 5.1 percent while the same for FY 14 was revised to 6.9 percent. This will give the bulls the right ammunition to buy with a renewed vigour on Monday.