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| Weekly Review: Markets end down on weak data, Q1 nos |
| SI Reporter / Mumbai Jul 16, 2011, 10:24 IST |
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Markets fell this week on weak cues from global peers as mixed corporate numbers dulled investor sentiments. The Sensex ended the week with a loss of 296 points (or 1.5%) at 18,562. Nifty shed 80 points to 5,581.
According to government data released on Tuesday, industrial growth fell to 5.6% in May this year from 8.5% in the same month last year, mainly due to the poor performance of the manufacturing and mining sectors. According to data released here, industrial growth in April-May this year averaged 5.7%, compared to 10.8% in the same period last year.
Inflation for the month stood at 9.44% compared to 9.06% in April and WPI primary articles index was at 2.8% on a month-on-month basis. The interest rates sensitive sectors seemed to have discounted the spike in inflation numbers.
India's services exports stood at $11.83 billion in May, 2011, up almost 3.2% in comparison to April. The country's total receipts from services exported stood at $11.46 billion in April, 2011, the Reserve Bank said in a statement.
Global markets were weak, due to a higher than expected unemployment data, euro-zone debt worries and fears that Moody's can cut the United States' triple-A credit rating. Markets in Italy and Spain fell as much as 7% on a day. However, stronger-than-expected Chinese Q2 June 2011 GDP data helped the bourses to recover in the middle of the week.
In other news, a cabinet reshuffle saw seven ministers being dropped while eight new faces has joined the cabinet. However, Prime Minister Manmohan Singh has left the 'big four' -- Finance, Home, Defence and External Affairs -- untouched.
India's Met department said, that monsoon rains were 19% below normal in the week ended July 13. The news took FMCG stocks into the red.
The Sensex dropped to a low of 18,326 on Tuesday due to Infosys results and IIP numbers. However, a freak trade took the index to a high of 18,936 on Friday. The last trading day of the week saw scripts of select heavyweights like SBI, Infosys, TCS and Reliance zoom as much as 20%, owing to the freak trade.
The week saw a couple of index bigwigs coming out with quarterly numbers.
IT bellwether Infosys tumbled 8.3% to Rs 2,731 after reporting a 5.3% quarter-on-quarter decline in consolidated net profit at Rs 1,722 crore for the first quarter ended June 30, 2011 under IFRS.
The company had a net profit of Rs 1,818 crore in the March quarter of the previous fiscal (2010-11), Infosys said in a filing to the Bombay Stock Exchange. On a year-on-year basis, the company has reported a 15.7% growth in net profit.
"We are disappointed with the guidance. The company expects the full-year EPS in the range of Rs 128 – 130, as compared to the market expectation of Rs 132. This has caused the stock to fall sharply post results," said Sanjeev Hota, Asst. Vice President Research (IT), Sharekhan.
Bajaj Auto dropped 2.6% to Rs 1,419 on a dissapointing set of Q1 numbers. The two-wheeler maker has reported 21% growth in net profit at Rs 711 crore for Q1FY12. The company had a net profit of Rs 590 crore in the June quarter of the previous fiscal.
TCs, in spite of a strong growth in Q1, dropped 2%. The company reported a net profit of Rs 2,380 crore, up 28% from Rs 1,863 crore in Q1FY11. The company's revenues increased 31% at Rs 10,797 crore for the quarter. Among other IT stocks - HCL Tech and Wipro advanced while Infosys once again ended lower, the stock was down 8% for the week.
Among other stocks, the long-awaited Rs 11,500 crore share sale of state-run Oil and Natural Gas Corp (ONGC) has been deferred again and is unlikely to hit the market before mid-August. Post-FPO, the government's stake in ONGC would come down to 69.14% from the current 74.14%.
Sugar and tea stocks witnessed buying though the week. Aviation and OMCs also moved due to a fall in crude prices.
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