Weekly Report: Markets register modest gains

The markets have ended yet another week on a tepid note, continuing its listless performance of the last couple of weeks. The Sensex ended at 18143, higher by 23 points and the Nifty ended at 5452, up 14 points.

If one may consider it as a consolation of sorts, though, the weekly range was broader this time around. The Sensex oscillated in a wide range of nearly 400 points between the a high of 18309 and a low of 17914 before ending the week comfortably above the 18k mark. There was a lot of activity below the surface as select pivotals surged after reporting upbeat earnings and the broader market universe, consisting of midcap and smallcap indices, left a mark on the otherwise dull proceedings. And the markets were impervious to the rather discouraging news flow on the food inflation and IIP front.

Coming to the relatively higher volatility of around 400 points--The markets had begun the week on a cheerful note, with the Sensex gaining 143 points and Nifty adding 46 points. Fears surrounding the Chinese economic story and surfaced in the middle of the week as data showing that Chinese import growth was below expectations had a ripple effect on markets worldwide. And concerns surrounding the Fed meet only aggravated the situation. The Shanghai plunged more than 3%, Wall Street and other Asian and European indices shaved off more than 2% and Dalal Street did not escape unscathed, taking a hit of more than a percent. But the return of normalcy on the global front succeeded in calming frayed nervous and we recovered sufficiently well to end around the previous week’s levels.

Select pivotals surged after reporting upbeat earnings. Tata Motors was the leading gainer on the BSE during the week, spurting to a life-long high of Rs 1017, stronger by 13.7%. The auto major reported a consolidated net profit of Rs 1,989 crore for the first quarter ended June 2010 as against a net loss of Rs 329 crore in the same period a year ago. Net sales grew 64% to Rs 26,876 crore from Rs 16,366 crore during the recently concluded quarter.

SBI zoomed by 8.7% at Rs 2849. The country's largest lender posted a jump of 25% in net profit for the April-June quarter to Rs 2,914.2 crore, compared to Rs 2,330.37 crore in the same period a year-ago.  The consolidated net profit of the bank, however, showed a growth of 21.5 per cent to Rs 3,467.09 crore for the quarter ended June 30, 2010.

Jindal Steel jumped by 6% at Rs 663, while DLF, HUL and ONGC gained between 3% and 5% each.

While the benchmark Sensex inched higher by a mere 0.1% for the week, the midcap index gained 1.4% at 7642 and the smallcap index added 14.3% at Rs 9710.
 
In the midcap space, Anant Raj Industries surged by 19% at Rs 137, Info Edge zoomed by 17% at Rs 1120 and Bombay Dyeing gained 16% at Rs 661. Among the other major gainers, Gujarat Flurochem, Indiabulls Real Estate and Patni Computers added between 14% and 15% each.

In the smallcap space, Raymond spurted by 55% at Rs 374, Minda Industries strengthened by 32% at Rs 369 and Rainbow Papers added 25% at Rs 55.

On the other hand, Sterlite slid by 8.9% at Rs 160 on the buzz that parent Vedanta may buy a majority stake in Cairn India. Wipro shed 4.3% at Rs 414 and M&M lost 3.3% at Rs 627. Infosys, RCom and HDFC were the other major losers during the week.

And Tata Steel ended the week 0.7% lower at Rs 527. The steel major reported a consolidated net profit of Rs 1,790 crore for the April-June quarter against a loss of Rs 2,238.53 crore in the corresponding period a year ago.

Meanwhile, the food inflation for week ended July 31 rose to 11.4% from 9.5% in the previous week. On a yearly basis, cereals registered a growth of 6.9%, driven mainly by higher prices of pulses, rice and wheat. Pulses became dearer by 20.74%, prices of rice and wheat rose by 6.89%  and 7.93% respectively during the week under review over the same period last year.

The industrial output in June increased at a slower-than-expected 7.1% from a year earlier, its slowest pace in 13 months. Growth in manufacturing, which constitutes around 80% of the Index of Industrial Production (IIP), fell to 7.3% from 8% a year ago.