The Indian equities markets gave up some of its gains in a volatile week's trade amidst negative global and domestic cues. However, a ratings upgrade by S&P helped review sentiments.The benchmark Sensex lost 1.71 percent in the week ended Sep 26 from its previous weekly close on Sep 19. The index closed at 26,626.32 points, while it had ended trade at 27,090.42 points on Sep 19.In the previous week the 30-scrip Sensitive Index had gained 1.12 percent in the week ended Sep 19 from its previous weekly close on Sep 12. The index closed at 27,090.42 points, while it ended trade at 26,816.56 points on Sep 12.The index had remained range bound around 27,000-point mark through out the week ended Sep 26, despite losses. However, negative sentiments prevailed as the Supreme Court cancelled all coal blocks allocated between 1993 and 2011.
Scrips of banks, metal, cement and energy companies tumbled. Globally, China hinted at not going ahead with its stimulus programme, which also spooked the markets. The European PMI data also did not help the markets which continued its slide coupled with anxeity over an early hike in interest rate also impacted investor sentiments."The Supreme Court decision to cancel all (except four) coal blocks led to sell off especially in JSPL and Hindalco. Markets remained volatile on Friday but bounced back at the end of trading session as S&P upgraded the outlook on the India's credit,"said Sanjeev Zarbade, vice president- private client group research, Kotak Securities."The correction provides investor with an opportunity to buy quality stocks."
Other analsty pointed out that the sharp fall in Indian markets was also due to foreign investors going on a selling spree in recent sessions due to global strength in U.S. dollar amid further signs of economic recovery in the US. For the week ended Sep 26, the FPIs massively sold stocks worth Rs.2,487.02 crore. The FPI's only bought shares worth $75.40 million or Rs.458.34 crore during the week ended Sep 26, according to data with the National Securities Depository Limited (NSDL).For the week ended Sep 19, the FPIs had bought shares worth $354.24 million or Rs.2,159.67, which helped propel the Indian equities market to subsequent new highs.The foreign institutional investors (FIIs) along with sub-accounts and qualified foreign investors have been clubbed together by market regulator Securities and Exchange Board of India (SEBI)to create a new investor category called FPIs.
The FPIs had remained net sellers Friday. They sold shares worth $68.21 million, or Rs.416.26 crore, on Sep 26.On Friday, the Sensex closed trade 158 points or 0.60 percent up after international ratings agency S&P Friday revised India's credit outlook to 'stable' from 'negative'.Healthy buying was observed in bank, metal, capital goods, healthcare and automobile sectors, whereas selling pressure was seen in information technology (IT), fast moving consumer goods (FMCG) and technology, entertainment and media (TECK) sectors.The Sensex which opened at 26,429.30 points, closed at 26,626.32 points, up 157.96 points or 0.60 percent from the previous day's close at 26,468.36 points.It touched a high of 26,721.03 points and a low of 26,220.49 points in the intraday.The rating agency said it revised India's rating from earlier 'BBB-' as it expected the government to keep its fiscal consolidation targets.The S&P said: "The outlook indicates government can implement fiscal and economic reform. Rating outlook revision shows improved political setting."
"Political setting offers conducive environment for reforms. Government reform pick-up may let RBI (Reserve Bank of India) draft effective policy." Finance Minister Arun Jaitley is sticking to the target of fiscal consolidation under which he aims to bring it down to 3.6 percent of the GDP by 2015-16.The major Sensex gainers Friday were: Hindalco Inds, up 5.25 percent at Rs.157.40; Sun Pharma, up 4.30 percent at Rs.807.10; Mahindra and Mahindra, up 3.16 percent at Rs.1,393.65; ONGC, up 3.14 percent at Rs.412.20; and Tata Steel, up 3.10 percent at Rs.474.20.While, the major losers on Friday were: Dr Reddy's Lab, down 2.61 percent at Rs.3,227.25; HDFC, down 1.90 percent at Rs.1,037.75; GAIL, down 1.51 percent at Rs.443.55; Hero MotoCorp, down 1.30 percent at Rs.2,896.20; and ITC, down 1.22 percent at Rs.371.75.