Market slips for third week on housing loan scam

Domestic indices extended their losing streak to a third consecutive week after CBI exposed the housing loan scam. Realty stock tumbled over 13%.

Major news for the week

Fertiliser stocks dip as government cuts NBS subsidy

Siemens’ FY2010 consolidated net profit up 7% YoY

CBI unveils fake housing loan scam, 8 officials arrested

Food inflation eases to 10.15%

M&M to buy 5.5% of BT's stake in Tech Mahindra



Indian Indices

The bears have been in a party mood post Diwali after the bulls enjoyed their party till Diwali by taking the Sensex above the 21,000 level. Equity benchmarks have seen carnage for a third consecutive week and the reasons are: housing finance scam unearthed by Central Bureau of Investigation, sell-off in global markets due to Korean war fears and continued credit concerns in European continent. Political instability due to 2G spectrum scam was another reason for a sell-off in domestic stocks.

During the week, the Nifty breached another significant level of 5700 on the downside. The Sensex and the Nifty swung 1034 and 330 points respectively during the week. Wrapping the week, the Sensex shut lower by 449 points or 2.29% at 19137 while the Nifty closed lower by 139 points or 2.35% at 5752.

Global Indices

Major world indices ended the week on a mixed note. Asian indices fell the most except Japan’s Nikkei that ended the week marginally higher. Hong Kong’s Hang Seng index and France CAC 40 index slid the most by posting losses of 3.09% and 2.58% respectively.

Sectoral and stock screening

Almost all the 13 sectoral indices ended the week in the red, the exceptions being the BSE Information Technology (IT) and BSE TECk indices that ended in the green with gains of 2.02% and 0.70% respectively. On the other hand, the BSE Realty index was the worst performer by sliding 13.57%, followed by the BSE Metal index that declined by 6.36% and the BSE PSU index that shed 6.1%. The rest of the indices ended the week lower in the range of 0.75-5.24%.

Looking into 'A' group stocks, the top performer of the week was Indusind Bank that gained 7.15% followed by Jain Irrigation that surged 5.34% while TVS Motor rose 5.28%. On the flip side, the DB Realty index slid the most by 41.12%, followed by Hindustan Construction Company which fell 28.96% and LIC Housing Finance lost 27.97%.

FII/MF Activity

The FIIs turned buyers during the week after last week’s sell-off. They bought Indian shares worth a net Rs1,816.50 crore. The domestic institutional investors also turned buyers this week buying Indian stocks worth a net of Rs189.50 crore during the week.

Outlook

Investors are eagerly looking forward to the announcement of India’s second quarter gross domestic product (GDP) data. It is scheduled to be announced in the coming week on November 30, 2010. Investors are also awaiting the data on the monthly auto sales, cement dispatches numbers plus the export import data. Any further action on the housing scam will have an impact on the domestic market. Global markets’ performance along with FII action will also have a say in determining the fate of the domestic market.