Markets close week with 1% decline

Markets registered losses this week owing to a rise in petrol prices, sustained foreign fund selling and weak results from SBI. The Sensex down 205 points and the Nifty down 58 points.

Major headlines for the week

Inflation eases to 8.66% in April

SBI net profit at Rs21 crore in Q4

L&T Q4 net profit up 17% yoy

Ashok Leyland Q4 net profit rises 34%

Higher subsidy burden drags OIL, ONGC, GAIL




Indian indices

Markets were under pressure in the first half of the week as a sharp rise in petrol prices and an expected increase in diesel rates fanned concerns of an acceleration in price line. Easing of inflation in April also did not provide any respite. Massive selling by foreign institutional investors ( FIIs) and concerns over high interest rates impacting corporate profitability, kept market participants edgy. Also, unexpected sharp plunge is State Bank of India (SBI)’s results and government hiking contribution of upstream oil firms towards fuel subsidies weighed on the sentiments. Profit booking was seen after a hike in petrol prices, impacting rate sensitive sectors, which dragged the key indices to eight week low. However, better than expected results by Larsen & Tourbo (L&T) and Ashok Leyland helped the markets trim weekly losses. Bargain hunting emerged after recent steep slide, which led the markets recover.

The Sensex swung 472 points between a high of 18493 and a low of 18021 and closed the week at 18326, down by 205 points or 1.11%. The Nifty swung about 141 points between a high of 5542 and a low of 5486 and ended at 5545, down 58 points or 1.05%.

Global indices

All the global equities closed the week on a negative note. Germany's DAX 100 index was the biggest loser of the week, falling by 1.84%, then comes Sensex down by 1.11% and France’ CAC 40 index declined by 0.70%. However, London’s FTSE 100 was the only gainer, up by 0.38%.Markets close week with 1% decline

Sectoral and stock screening

Eight sectors ended the week in red, while five closed in green. On the losers’ side, BSE PSU was the worst hit, down by 4.74%, following that BSE Oil & Gas fell by 4.62%, BSE Realty lost by 4.18% and BSE Bankex dropped by 3.43%. On the gainers' side, BSE Capital Goods (CG) rose by 3.99%, followed by BSE Consumer Durables (CD) up by 1.04% and BSE Information Technology (IT) up by 0.40%.

Coming to 'A' group stocks, top three gainers of the week - Larsen & Toubro (L&T) soared by 8.05% on healthy results, Pantaloon Retail gained by 7.39%, and Mundra Port & Special Economic Zone up by 7.11%. Top three losers of the week - State Bank of India (SBI) dropped by 12.34% on reporting poor earnings results, Patni Computer Systems fell by 11.90% and ONGC declined by 10.06% on higher subsidy burden.

FII/MF activity

FIIs were heavy sellers of the Indian stocks this week to the tune of Rs4,215.6 crore as against net sell of Rs639.1 crore seen in the previous week. The domestic institutional investors (DIIs) turned sellers this week to the tune of Rs809.9 crore as compared to net buy of Rs101.9 crore seen in the previous week.

Outlook

Domestic market may remain volatile in the upcoming week ahead of F&O expiry on May 26, 2011 alongwith result announcement. The developments on the global front, the progress of monsoon and flow of foreign funds will also determine the trend of the markets.