Weekly: Markets end flat amid high volatility

Benchmark share indices ended flat in the week to May 31, amid high volatility, as most of the gains were wiped off by Friday's crash in which the Sensex registered its biggest decline in 14 months.

In the week ended May 31, the 30-share Sensex ended up 0.3% at 19,760 and the 50-share Nifty ended flat at 5,986.

Further, Reserve Bank of India governor on Thursday said  that inflation still remains high and it will take into account the current account deficit for policy decisions.

The central bank further said that loans recast after April 1, 2015 should be classified as non-performing asset (NPA) and provisioning norms for fresh standard restructured advances would be increased to five per cent from 2.75 per cent, for the interim period from June 1, 2013.

On Friday, the Sensex crashed 455 points and the Nifty slumped 138 points after fourth quarter GDP which came in line with expectations coupled with the rupee which slumped to a 11-month low of Rs 56.51 alongwith  RBI's warning on upside risk to inflation and high current account deficit doused hopes of rate cut by the central bank at its upcoming policy meet in June.

On the macro front, GDP for the fourth quarter (Jan-Mar 2013) was in-line with market expectations at 4.8%. The manufacturing sector grew at an annual 2.6% during the quarter, while farm output rose just 1.4%, the data showed.

India's economy grew by 5% in 2012-13, its lowest rate in a decade but in-line with an official estimate, data showed. Helped by higher revenue mop up, fiscal deficit for 2012-13 worked out to be at 4.89% of GDP, down from revised estimate of 5.2 %, sources said.

The Realty index was the top loser down 6.3% during the week under review followed by Bankex, Capital Goods and Metal indices. Indices which gained include, Consumer Durables, Oil&Gas, IT and FMCG indices.

Tata Motors was the top Sensex gainer up 8.8% after the company aided by the continued strong performance by Jaguar Land Rover (JLR) and the pruning of losses at the stand-alone level, Tata Motors posted an estimate-beating performance in the fourth quarter.

Its consolidated profit for the quarter ended March 31, stood at Rs 3,945 crore against Rs 6,234 crore posted in the same quarter a year earlier, a drop of 37 per cent. Analysts had estimated a net profit of about Rs 3,000 crore for the reporting quarter.

Sun Pharma ended up 7.8%. The pharma major reported 23 per cent increase in consolidated net profit to Rs  1,011.6 crore for the quarter ended March. Net profit in the year-ago period had stood at Rs 820 crore. Total income from operations stood at Rs 3,087 crore, against Rs 2,336 crore in the year-ago period. The board of directors recommended issue of bonus shares in the ratio of 1:1 subject to the receipt of approval of the equity shareholders, the company said.

Coal India ended up 4.7%. The company reported better-than-expected 35% year-on-year (yoy) jump in its consolidated net profit at Rs 5,413 crore for the fourth quarter ended March 31, 2013 on back of higher than expected sales volumes. The state-owned coal manufacture had profit of Rs 4,013 crore in a year ago quarter. Net sales increased 2.5% to Rs 19,904 crore on yoy basis. EBITDA or operating profit increased 51% yoy to Rs 6,600 crore due to lower employee costs.

Reliance Industries ended up 2.3% after the company announced a "significant" gas and condensate discovery in the KG-D6 block, off the eastern coast. The discovery, named D-55, has been notified to the government and the management committee, said the three partners.

Infosys gained 2.6% and TCS ended 2% higher tracking weakness in the rupee against the US dollar. Both the software majors earn most of their revenus from exports to the US.

DLF ended down 8% after the realty major reported weak earnings for the fourth quarter ended March 31, 2013 because of lower sales. The company reported standalone net profit of Rs 196 crore, down nearly 33% compared to Rs 291 crore in the same quarter last fiscal. Total income for the quarter also declined to Rs 1,004 crore from Rs 1,260 crore in the same quarter last fiscal. For the year ended March 31, 2013 net profit fell sharply by nearly 50% to Rs 502 crore from Rs 1,042 crore in the last fiscal ended March 31, 2012. Sales for the fiscal ended March 31, 2013 declined to Rs 3,305 crore form Rs 4,583 crore in the last fiscal.

Mahindra & Mahindra ended down 0.2%. The auto major riding on the continued demand for sports utility vehicles (SUVs), Mahindra & Mahindra (M&M), India’s largest manufacturer of utility vehicles and tractors, posted higher than expected net profit for the fourth quarter. The Mumbai-based company posted a growth of two per cent in net profit at Rs 889 crore for the quarter ended March 31, against Rs 875 crore in the corresponding quarter of last year. Analysts tracking the firm had assumed a net profit of Rs 760 crore for the reporting quarter.

Sensex losers include, Cipla, Tata Steel, SBI, Gail (India), Hindalco, ICICI Bank, L&T and HDFC among others.

In the broader markets, the BSE Mid-cap ended flat with a positive bias and the BSE Small-cap index ended down 0.8%.