Sensex underperforms its peers, down for fifth week

It was again a bad week for markets, with the Sensex falling by 1.81%. The index was the only loser among its global peers.

Major headlines for the week

Food inflation at 9.80% versus 9.03%

Mphasis Q3 consolidated net profit down by 28%

FDI inflow to surge sharply to $19.5 billion

57 A-group stocks hit 52-week low on BSE; Banks worst hit

13 major banks hit 52-week low



Indian indices

Markets fell for the fifth straight week as concerns over the health of the global economy dampened investors' appetite for bargain buys. Nervous investors dumped shares across the board amid concerns about corporate earnings growth. Sustained selling by foreign fund also weighed on the sentiments. The Sensex fell below the psychological 16000 mark and the Nifty slid below 4750 level for the 1st time since February 10, 2010. The key indices fell in three out of five sessions of the week.

The Sensex swung 784 points between a high of 16549 and a low of 15766 and closed the week at 15849, down by 293 points or 1.81%. The Nifty swung about 246 points between a high of 4966 and a low of 4720 and ended at 4748, down by 98 points or 2.02%.

Global indices

The world stocks rallied on speculation that the Federal Reserve may announce further measures to stimulate a faltering US economy. France CAC 40 stood the top gainer, rising by 3.38%. The US indices - Dow Jones and Nasdaq rose by 3% each. In Asian indices, Shanghai Composite gained by 3.07%, Hang Seng rose by 0.94% and Nikkei up by 0.9%. The Sensex was the only loser, down by 1.81%.

Sectoral and stock screening

Barring BSE TECk marginally up by 0.03%, all the sectoral indices ended the week on a negative note. BSE Metal was the top loser of the week falling by 5.29%, following that BSE Bankex down by 4.81% and BSE Realty lost by 4.01%. Rest of the sectors fell between 0.03-3.40%.

Coming to 'A' group stocks, UltraTech Cement rose by 6.02%, Indian Hotels Company surged by 5.06% and ABB gained by 4.94%. Top three losers of the week - SKS Microfinance dropped by 19.85%, Manappuram Finance fell by 14.86% and Jet Airways declined by 14.85%.

FII/MF activity

The foreign institutional investors (FIIs) continued its selling activity for the fourth consecutive week. The FIIs sold Indian equities worth a net of Rs4,370.8 crore as against net sell of Rs1,022.2 crore seen in the previous week. The domestic institutional investors (DIIs) were in the buying mode for the fourth straight week. The DIIs bought Indian equities worth a net of Rs604.9 crore as compared to net buy of Rs99.1 crore seen in the previous week.

Market Outlook

Next week is a truncated trading week. The stock market remains closed on Wednesday, 31 August 2011, on account of Ramzan Id and again on Thursday, 1 September 2011, on account of Ganesh Chaturthi.

Auto and cement shares will be in focus next week as companies from these two sectors start unveiling monthly sales for August 2011 data from Friday, 2 September 2011. Good rains this year may generate buying interest in shares of two-wheeler makers and consumer goods firms. On the macro front, the government will unveil data on first quarter GDP growth on Tuesday, 30 August 2011, which may provide cues on the central bank's likely policy stance at its mid-quarter policy review on 16 September 2011.