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The Sensex oscillated in a range of about 500 points between an intra-week high of 22,737 and a low of 22,247 before closing unchanged at 22,628 and the Nifty edged higher by three points to 6,779. There was out-performance on the broader market front, though, with the Mid-cap Index and Small-cap Index strengthening by 0.8 per cent each at 7,339 and 7,524, respectively.
The sedate close to the week actually camouflages the battle between the bulls and bears for supremacy, which culminated in an inconclusive draw of sorts for the time being. The bears dominated the first two sessions of the week, but the bulls hit back with a vengeance on Thursday with a 352-point rally that offset the losses during the initial part of the week. In the process, they managed to successfully defend the psychologically important 6,700-mark on the Nifty on a weekly closing basis. It may be recalled that benchmark indices had ended higher by 1.2 per cent in the previous week, as foreign institutional investors remained overweight on India and continued their buying spree. The stock market was shut on Monday on account of Dr. Baba Saheb Ambedkar Jayanti and on Friday due to Good Friday.
Among the sectoral indices, the BSE FMCG Index saw immense buying activity to register gains of 2.2 per cent, while auto and oil & gas added over 0.6 per cent. However, the Realty Index declined by 4 per cent, the metal and capital goods were down 0.8-1 per cent and the bank index slipped 0.4 per cent.
In economy-related news, the headline WPI inflation surprised the Street negatively by rising above street expectations. The inflation re-accelerated in March to 5.7 per cent Y-o-Y, the fastest pace since December. Wholesale price inflation re-accelerated in March as price growth across all the major WPI categories increased. Food price inflation ticked higher, as vegetable prices rose quickly. The Consumer Price Index (CPI) inflation also quickened to 8.31 per cent in March 2014, as compared to 8.03 per cent in February 2014, owing to higher inflation in fruits and vegetables which stood at 17.19 per cent and 16.80 per cent, respectively during the month.
The global credit rating agency Standard & Poor's said it might upgrade India's rating outlook if the government that is elected next month addresses some of the country's fiscal and economic challenges through steps such as passing a goods and services tax. It was also a big week for Lok Sabha elections - the fifth phase (the biggest among nine phases) of voting for 121 constituencies across 12 states was held on Thursday, which included all of Karnataka, some parts of Maharashtra and Rajasthan.
The global markets were mixed. While the Asian bourses barring Japan did well, their European counterparts encountered selling pressure. European stocks struggled, with the DAX, FTSE and CAC ending down by 3.9 per cent, 1.9 per cent and 1.8 per cent, respectively, as the US dollar weakened due to the dovish statements by the US Fed and profit-booking ahead of the Easter holidays.
Among individual stocks, United Spirits zoomed around 11 per cent to emerge as the largest gainer after Diageo announced an open offer to buy a further 26 per cent stake in the company at Rs 3,030 a share. Cairn India, ITC, ICICI Bank and Hero Motocorp were up two-three per cent each. On the other hand, DLF tanked 9.5 per cent to be the top loser on the BSE. HDFC declined 2.6 per cent after MSCI reduced the weightage of the bank further in its MSCI India Index and warned the stock will be dropped from MSCI India Index if it remains on RBI ban list at November review.
Results calendar
The March quarter earnings season kicked off; the top four IT companies kicked off the March quarter earnings season with positive commentary for the year ahead (FY15). The BSE IT Index climbed gained 0.8 per cent, as Wipro and TCS rallied three per cent each, while HCL Technologies and Tech Mahindra climbed 1.7 per cent each post the announcement of results.
Infosys, the country’s second largest IT exporter, reported fourth quarter numbers more or less in line with Street expectations. In the quarter ended March, the Bangalore-based company posted a 25 per cent annual growth in net profit at Rs 2,992 crore, more than the consensus estimate of Rs 2,835 crore. Sequentially, the company's net profit grew 4.1 per cent. At Rs 12,875 crore, the revenue in the March quarter was 23.2 per cent higher annually but 1.2 per cent lower sequentially, mainly due to some project ramp-downs and cancellations during the quarter.
Tata Consultancy Services, India's largest IT services exporter, posted a 51.5 per cent rise in quarterly net profit, beating expectations, as it won more contracts in Europe and some emerging markets. The net profit for the fourth quarter ended March 31 rose to Rs 5,297 crore from Rs 3,497 crore a year earlier. The country’s third-largest software services firm Wipro Technologies posted a 28.8 per cent increase in profit to Rs 2,226.5 crore in the quarter ended March 31 on the back of improving global economic sentiment and cost optimisation. The Bangalore-based firm had registered a profit of Rs 1,728.7 crore in the fourth quarter ended March 31, 2013.
Mid-tier IT services company Mindtree reported 24.5 per cent jump in consolidated net profit to Rs 98.2 crore for the quarter ended March 31, 2014, helped by broad-based growth and strong deal pipeline. The Bangalore-based firm had posted a net profit of Rs 78.9 crore in the year-ago period.
HCL Technologies reported a better-than-expected 8.5 per cent sequential growth in consolidated net profit at Rs 1,624 crore for the third quarter ended March 31, 2014 (Q3).
Meanwhile, in results announced over the weekend, the Mukesh Ambani-promoted Reliance Industries' net profit in the January-March quarter increased 0.8 per cent on an annual basis to Rs 5,631 crore, the highest in a quarter in two years. While this was very close to the Street’s estimates of Rs 5,656 crore, what came as a surprise to many analysts was the company’s better-than-expected operational performance. For the full 2013-14 financial year, RIL’s standalone net profit rose 4.7 per cent over that the previous year to Rs 21,984 crore. Its consolidated net profit, at Rs 22,493 crore, too, was very close to the consensus estimate of Rs 22,532 crore.
Week ahead
The results season has begun and attention is therefore likely to swing between the result activity and expectations from the general elections.
During 2009 elections, the Congress had won a greater-than-expected number of seats, and the stock markets had risen 17 per cent over the two days following the election results. In the previous general elections in 2004, when the BJP unexpectedly lost, the markets had declined by 17 per cent over the two days after the election results.
