Markets slip marginally for the week

Consumer Durables, Power, Capital Goods scrios among the top losers

Indian markets ended lower for the week ignoring better than expected IIP data and easing inflation numbers with the Sensex down 0.5% to 19,317.25 and the Nifty slipped 0.47% to end the week at 5,879.6.

In the broader markets, after weeks of out-performance, the smallcap and midcap indices corrected over 1% each, underperforming the benchmark indices.

On the macro front, headline inflation fell to a 10-month low of 7.24% in November, from 7.45% in the previous month, fuelling hopes of a rate cut by the Reserve Bank of India.

This was the last crucial data before the central bank’s monetary policy review on December 18. A rate cut by RBI would boost economic growth, languishing below six per cent for three quarters in a row till July-September 2012-13.

Economists, however, said RBI will maintain a status quo on the rate front on December 18. YES Bank Chief Economist Shubhada Rao said: “We expect RBI to maintain status quo in its mid-quarter review on December 18, though it is likely to acknowledge the early moderation in price pressures.”

Also, industrial production growth rate bounced back to a 16-month high of 8.2% in October on good performance of the manufacturing, power sector and higher output of capital as well as consumer goods, indicating sudden recovery in the economy. The factory output, as measured by the Index of Industrial Production (IIP), contracted by 5% in October last year.

Meanwhile, India's exports in November contracted 4.17% year-on-year, for the seventh month in a row, to $22.2 billion, due to slowdown in demand in the US and European markets. However imports grew by 6.35% to $41.5 billion in November, leaving a trade deficit of $19.28 billion. The trade deficit increased to $19.28 billion in November 2012 from $15.83 in November 2011.

Amidst the improving macros, foreign institutional investors continued to remain positive with a purchase of shares worth Rs 13,278.20 crore for the month of December so far .

Back to the markets, among the sectoral indices, Consumer Durables, Power, Capital Goods, PSU, Realty and FMCG indices lost 1.5-4.6% and Oil & Gas slipped 0.8%. On the other hand, the winners were Health Care up 0.1%, Bankex added 0.6% and the top gainer was Auto index which rode up 2%.

The movers in the auto space were Bajaj Auto, Tata Motors, Hero MotoCorp and Mahindra & Mahindra which gained 1-7%.

Apart from the auto names, the top gainers among the Sensex-30 were Jindal Steel, Sun Pharma and HDFC which added 2-5%. The other notable gainers were Tata Steel, Reliance Industries, ICICI Bank, SBI and Sterlite which stepped up between 0.3-0.6%.

Among the draggers were BHEL, NTPC, Tata Power, Bharti Airtel, Hindalco, ONGC, Coal India, HUL, Maruti Suzuki, TCS, L&T, ITC and Infosys lost 2-7%.

For the coming week, markets are likely to reamin volatile with the RBI's mid-quarter monetary policy which is scheduled on 18th of this month wherein a rate cut is anticipated.