Sensex shrugs off last two-week gains

Major news for the week:

Index of industrial production for April at 17.6%

Food inflation rises to 16.74%

Reliance Industries makes 6th oil discovery

Government defers decision on fuel price hike

Bharti Airtel attains Zain deal closure



Weekly report

After registering back-to-back weekly gains, bulls took a pause and signed off this week with marginal losses. The bears were back with a bang this week as Euro zone debt crisis resurged on worries that Hungary is close to defaulting and disappointing US job data. This dampened the market sentiment globally.

Indian bourses started the week on a dismal note amid global sell off after fresh fears that Europe's debt crisis could spread as Hungary scrambled to calm worries that the nation is close to defaulting on its debts and disappointing US job data. These negative signs dragged the Sensex and the Nifty below psychological levels of 17000 and 5000 respectively. For the first two trading sessions, the indices traded weak. However, the markets recovered most of his losses in the last three sessions after China’s May export grew 50%, robust April index of industrial production (IIP) reading and jump in May auto sales numbers back home, and revival in monsoon helped the Sensex and the Nifty to regain the crucial levels of 17000 and 5000, shrugging off rising inflation (food inflation rose to 16.74% for week ended May 29, 2010 from 16.55% previous week) worries back home.

India’s index of industrial production (IIP) rose 17.6% in the month of April compared to 13.5% in previous month.

Auction for India's broadband wireless access (BWA) spectrum ended today (Friday June 11, 2010) after 16 days of aggressive bidding. The Union Government raised over Rs38,300 crore from the BWA spectrum auction.

The market continued to remain volatile this week, as the Sensex swung 570 points and the Nifty 172 points. This week BSE Midcap (0.08% down) and BSE Smallcap (0.03% down) out performed the Sensex to close flat. Wrappinp the week, the Sensex signed off at 17065, lower by 53 points or 0.31% while the Nifty shut at 16 points or 0.31% down at 5119.

On the global front, the European markets and the US markets outperformed the Asian indices. Dow Jones gained 2.42%. The major European indices posted significant gains. The Asian indices closed mixed, with Japan’s Nikkei down the most.

Auto and health care (HC) stocks did well for the week, with BSE Auto and BSE HC up by 1.57% and 1.46% respectively. BSE capital goods (CG), BSE Oil & Gas and BSE Power closed with marginal gains. Rest of the eight sectors were down, with BSE Realty losing the most, down by 4.04%. BSE information technology (IT), the second loser, fell by 2.55%.

Among 'A' group stocks; Gainers’ were - IRB Infrastructure Developers topped the chart, up by 9.99%, followed by Bharat Forge that surged by 7.06% and Cummins India that rose by 6.98%. Losers’ were - REI Agro slid the most by 11.18%, followed by GTL Infrastructure that fell by 4.88% and Bharat Petroleum Corporation Ltd (BPCL) that shed 4.05%.

During the week, foreign institutional investors (FIIs) were the net buyers, bought the stocks worth Rs493.90 crore. Domestic institutional investors (DIIs) continued to be the net sellers, sold Rs37.30 crore worth of shares in this week.

In the coming week, events like monthly inflation data for the month of May and first installment of corporate advance tax numbers giving the hint of Q1 June 2010 results may decide the future path of the market. An empowered group of ministers (EGoM) meet on Thursday, June 17 2010 considering de-control of fuel prices will also be in the focus. Progress of south-west monsoon will also play a crucial role in coming week. The global markets may continue to impact the domestic market. FII flows will also decide the course of the markets.