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Weekly: Sensex posts biggest weekly loss in 6 months

Banks, auto, real-esate lead slump most

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India's benchmark stock market index started Samvat 2069 on a red note, posting its biggest weekly loss in six months, on broad based selling witnessed in banks, capital goods on caution ahead of of Parliament and amid issues.

Markets posted losses for six consecutive trading session and are now at their lowest level since mid-September as investors remained uncertain over Congress-led United Progressive Alliance government's ability to muster majority from opposition members over passing key reforms including overseas investments in multi-brand retail, aviation announced earlier.

The Bombay Stock Exchange's Sensex fell 0.88% to 18,309.37 while National Stock Exchange's declined 1% to 5,574.05 for the week. The measures fell 2% for the week, posting their biggest weekly drop since May 11.

European markets also posted their biggest weekly drop in five months while Standards & Poor's and the Dow fell nearly 1.5% for the week. Global risk appetite remained frail on concerns over exacerbating European debt crisis coupled with looming fears over US taxation issues that may lead to taxation hikes and automatic spending cuts slipping world's biggest economy into recession.

Back home, the index of industrial production (IIP),unexpectedly contracted to 0.4% in September, compared to analyst's estimate of 2.8% expansion while August output was revised down to 2.3% from 2.7% earlier.

Meanwhile Wholesale Price Index (WPI) inflation fell to a 8-month low of 7.45 percent in October. The measure quickened to 7.81% in the previous month. The government, however, revised the August inflation figure to 8.01% from provisional 7.55%.

Overseas investors net bought $33.39 million worth of local shares on Friday and $668 million in November till date, data on Securities and Exchange Board of India site showed.

Movers and shakers:


Rate sensitive stocks such as State Bank of India, ICICI Bank fell over 2% on Friday after Reserve Bank of India governor indicated inflation still remains a concern dampening hopes of any rate cut in the December 18 monetary policy.

Real estate stocks also fell, with DLF losing 2.7%, while Unitech dropped 5.6%.

Bharti Airtel surged 3.8% to end near its highest closing level since July 30. Shares rose after governmnet 2G auction fell short of demand leading to lower prices.

United Spirits posted 32% gains this week after British liquor giant Diageo Plc agreed to acquire 26% stake in the company.

Jul-Sep results:

DLF Ltd, country's biggest developer, said its net profit dropped 62.8 per cent for the quarter ended September on the back of gloomy sales activity and economic slowdown. The stock fell 2.6% on Friday.

Leading infrastructure firm Jaiprakash Associates reported an over 48% decline in its net profit to Rs 128 crore during the quarter ended September 30, 2012, largely due to hefty increases in finance costs and muted sales. It fell 1% on Friday.

Outlook:

Investors are likely to focus on winter sesson of the Parliament starting from November 22 while globally, minutes of Bank of Japan and Bank of England monetary policy along with US housing starts and jobless claims will gain limelight.

"Global cues are very important for the Indian markets and I expect fund flows to take a hit if there is some major negative news from global markets," said K Subramanayam, AVP, Institutional Research, Asit C Mehta.

Stocks such as Koutons Retail, Siemens India, Bajaj Hindustan and Mawana Sugars will announce their Jul-Sep earnings this week.

 

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