Markets close week with 2% loss

Concerns of economic crisis in the Europe and earnings disappointment dragged the markets this week. The Sensex fell 1.74% and the Nifty slid 1.60% on weekly basis

Major news for the week

Food inflation at 10.6% versus 9.32%

FM says growth will be slower than expected

Rupee weakens past 50 a dollar for 1st time since May 2009

Exide Industries falls after Q2 results

L&T Q2 net profit marginally up

Crompton Greaves Q2 net profit declines by 29%

TCS Q2 consolidated net profit up 6%

HDFC Bank Q2 net profit jumps by 31%

HCL Technologies Q1 net profit surges 50%



Indian indices

The Indian markets were unstable this week, reacting to chatters and rumors out of Europe. Caution prevailed across the globe ahead of a weekend meeting of European leaders to tackle the euro zone debt problem. Uncertainty over the euro zone debt crisis situation, slower-than-expected Chinese growth data and a warning on France's triple-A sovereign credit rating prompted investors to cut risks.

Back home, earnings disappointment from companies like HCL Technologies, TCS, Crompton Greaves, Exide Industries, Idea Cellular, L&T kept markets under pressure. India’s rupee falling past the 50 per dollar level for the first time since May 2009 also weighed on sentiments.

Inflation continued to remain a major concern as food inflation climbed to double digits in six weeks, signalling that Reserve Bank of India (RBI) may continue with its tight monetary stance in its policy review on Tuesday. The markets fell in four out of five sessions of the week.

The Sensex swung 520 points between a weekly high of 17189 and a low of 16669 and ended the week 297 points or 1.74% lower at 16786. The Nifty oscillated 149 points between a weekly high of 5160 and a low of 5011 and closed the week 82 points or 1.60% lower at 5050.

Global indices

All the global stocks closed the week in the negative zone owing to uncertainty in Europe. Shanghai Composite was the biggest loser of the week declining by 4.69%, then comes CAC 40 that fell by 4.16%, DAX 100 slipped by 3.36% and Nasdaq lost by 2.59%.

Sectoral and stock screening

Among the 13 sectoral indices, ten closed the week lower. Top losers — BSE CG was the worst performer down by 4.38%, BSE IT fell by 3.04% and BSE Realty declined by 2.96%. Only three gainers — BSE HC rose by 0.47%, BSE Bankex surged by 0.27% and BSE CD advanced by 0.03%.

Coming to 'A' group stocks, top three gainers of the week – Jaypee Infratech jumped by 26.19%, Gujarat Mineral Development Corporation advanced by 6.65% and Oracle Financial Services Software rose by 6.23%. Top three losers of the week – Crompton Greaves tumbled by 13.97%, Jain Irrigation Systems slipped by 11.55% and Exide Industries declined by 11.38%.

FII/MF activity

The foreign institutional investors (FIIs) sold Indian shares to the tune of Rs348.50 crore this week. The domestic investors sold Indian shares worth a net of Rs501.10 crore this week.

Outlook

Next week will be a truncated one due to Diwali holidays on Wednesday (October 26, 2011) and Thursday (October 27, 2011). The markets may remain volatile as investors have to grapple with a European Union summit, RBI policy meet, corporate results and F&O expiry.

The near-month October 2011 derivatives contracts expire on Tuesday (October 25, 2011) alongwith RBI’s monetary policy review on the same day. Stock-specific activity may dominate trade in the near-term as earnings flow in.