The markets ended lower for the second consecutive week amid a high dose of volatility. After beginning the week on a nervous note, the indices ignored the IIP shocker to make a valiant attempt at climbing new highs midway before the Infosys results and the impending Coal India IPO connived to give the investor sentiment a beating towards close. The Sensex oscillated in a range of 764 points between a weekly high of 20854 and a low of 20090 before ending at 20250, lower by 125 points or 0.6%, and the Nifty ended at 6062, down 41 points. The midcap index ended at 8311, lower by 18 points and the smallcap index ended at 10629, higher by 117 points.
The industrial growth slowed down to 5.6% in August from 10.6% in the corresponding period last year on the back of a 2.6% contraction in capital goods production. Among the main industry segments, manufacturing activity declined to 5.9% from 10.6% a year ago and mining sector growth was at 7% compared to 11% in August last year.
And inflation moved up to 8.62% in September, driven by the higher prices of essential items, compared to 8.51% in August. Meanwhile, the July figure was revised upwards to 10.31% from provisional estimate of 9.97%. However, this is the second consecutive month in which the overall inflation has stayed within single digits.
Meanwhile, Infosys kicked off the result season in style by beating street estimates with a 13.2% rise in its 2nd quarter net profit, helped by an increased spending on IT projects by clients. India's second-largest software services exporter said that its net profit for the second quarter ended September 30 rose to Rs 1,737 crore ($395 million) from Rs 1,535 crore a year ago. The company also declared an interim dividend of Rs 10 per share and a 30th year special dividend of Rs 30 per share.
The statement of the Chief Executive Officer S Gopalakrishnan terming the economic environment as “challenging” in light of the appreciating rupee may have led to some frayed nerves on the IT counters and inturn, had a cascading effect on the overall markets. The Sensex lost nearly 400 points on Friday and in the process erased the shortcovering 400+ gains registerd on Wednesday. The rupee has added 5.2% in the last 30 days as foreign institutional investors (FIIs) poured a record $23 billion in the equity market and $10 billion in the debt segment this year.
And the upcoming Coal India's (CIL) mega IPO further aggravated matters as investors and traders alike seemingly decided to stack up on cash ahead of Monday's opening. The state-owned Coal India's (CIL) mega IPO hits Dalal Street on October 18. The Centre is divesting its 10% stake in the Navratna company. The government has fixed the price band of CIL IPO at Rs 225-245 a share and is aiming to garner over Rs 15,000 crore through the offer.
Among the other major result candidate, Axis Bank reported a net profit of Rs 735.14 crore for the second quarter ended September, a 38.28% increase from Rs 531.64 crore a year ago, owing to strong growth in interest income. The country's third-largest private sector lender saw its net interest income (NII), which is the difference between the interest earned and interest expended during the same period, rising by 41% to Rs 1,615 crore as against Rs 1,150 crore in the corresponding quarter of the previous year.
The leading gainers on the Sensex were Tata Motors (strengthened by 4.6% at Rs 1156), Sterlite (gained 2.6% at Rs 178) and Wipro (added 2.4% at Rs 473). On the other hand, NTPC weakened by 5% at Rs 203, Bharti Airtel shed 4.8% at Rs 351 and RCom lost 2.6% at Rs 175. And Infosys, which saw a huge run-up ahead of its Q2 results, ended the week on a flat note at Rs 3076 due to the onset of profit-booking post its numbers.
In the midcap space, RCF soared by 28% at Rs 110, Chambal Fertilisers zoomed by 25% at Rs 92 and Vijaya Bank jumped by 17% at Rs 106. LMW, Rajesh Exports and GSFC were the other major gainers.
In the smallcap space, Binani Industries soared by 40% at Rs 235, India Glycols gained 38% at Rs 180 and Uflex added 36% at Rs 312. Karturi Global, Gulf Oil and Spanco were the other major gainers.