Weekly Review: Markets slip on global worries

Tata Steel, Hindalco, Cipla slip in weekly trades

Markets dropped this week on continued worries about the US fiscakl deficit and the strength of economy in the Euro zone. The BSE benchmark index shed 72 points or 0.4% at 18,755. Nifty slipped 11 points to 5,686.

Meanwhile, the broader market outperformed the Sensex, and advanced marginally.

The political uncertainty in the world's largest economy made investors wary of holdings riskier assets, and markets ended on a flat note on Monday. Markets edged higher on the back of healthcare and banking shares on Tuesday. Wednesday saw markets rallying following cues from global bourses after uncertainty over continuation of US economic policy ended as Barack Obama was re-elected as President for the second term. Investors booked profits on Thursday but the downside was capped on buying demand in auto shares. The Sensex ended nearly 1% lower on Friday weighed down by selling pressure in banking major SBI on concerns of rising non-performing assets and profit taking in index heavyweights.

Barack Obama won a second term as the President of the United States after defeating Republican challenger Mitt Romney in a closely fought battle. Overcoming what appeared to be a cliff-hanger, Obama finally managed to emerge winner after a convincing victory in the crucial state of California.

According to Sonal Varma, India economist at Nomura, “We expect some moderation in US growth next year. For India, the outcome is broadly status quo as regards the key policies. As regards bond yields, our house view is that we are bullish on bonds and expect the 10-year bond yields rally to 7.80 levels by March 2013, mainly because of domestic factors like open market operations continuing.”

State Bank of India (SBI) rose 0.18%. State Bank of India today posted a 30.16% jump in net profit at Rs 3,658.14 crore during the second quarter of current fiscal. The bank had registered a net profit of Rs 2,810.43 crore in the corresponding July-September period of last year.

Tata Steel fell 2.75% after reporting a consolidated (including Tata Steel Europe Ltd, formerly Corus) net loss of Rs 363.9 crore for the second quarter (July-September). This was due to lower steel prices and higher raw material costs, coupled with the poor performance of its Europe division.

Hindalco Industries' net profit fell 28.63% to Rs 359 crore on 1.72% decline in revenue from operations to Rs 6164 crore Q2 September 2012 over Q2 September 2011. Shares of Hindalco shed 3.7% at Rs 113.

Reliance slipped 2.3% after its chairman, Mukesh Ambani, came under attack from India Against Corruption (IAC) activists.

ONGC lost 3.24%. ONGC's net profit fell 31.77% to Rs 5896.57 crore on 9.44% decline in total income to Rs 21786.22 crore in Q2 September 2012 over Q2 September 2011.

Tata Power was the top loser among Sensex stocks. The company said it had acquired a 26 per cent stake in Indonesian miner PT Baramulti Sukses Sarana Tbk (BSSR). The acquisition, done through Khopoli Investments Ltd, a wholly-owned subsidiary of Tata Power, would give the power generator access to a part of the one billion tonne (bt) coal reserves held by BSSR and its subsidiary PT Antang Gunung Meratus (AGM).

Meanwhile, Cipla, the top gainer for the week added 4.3% t Rs 394 after India’s third-largest drugmaker by market value got US regulatory approval to export to the world’s biggest economy from its second-biggest plant.