Markets down for 3rd straight week; Nifty breaches 5K

The Indian markets ended lower for the third straight week. The Sensex was down 3.19% and the Nifty fell 5.07% for the week. Major headlines of the week: IIP for March at -3.5% vs 4.1% in Feb Exports grow 3.23% at $24.5bn; trade deficit widens to $13.4bn April car sales up 3.4% y-o-y Andhra Bank Q4 net profit up by 8% Central Bank hits monthly low after poor FY12 nos Kotak Bank FY12 cons net profit up 17% Indian Indices: The losing trend continued in the Indian markets for the third straight week, with the Sensex closing the week down by 3.19% and the Nifty down by 5.07%. Profit booking was witnessed throughout the week, which kept the sentiments bearish. Investors booked profits across the board on the back of domestic and global woes. Markets fell for the four out of five trading sessions of the week. On the economic front, the major disappointing news of this week was Index for Industrial Production ( IIP) for March 2012, which came in at -3.5% as compared to 4.1% seen in February 2012, which was below the expectations. From the earnings point of view - results of HDFC, Kotak Mahindra Bank, Hindalco Industries, Ranbaxy Laboratories, IRB Infrastructure Developers, Cadila Healthcare, Cipla, Federal Bank, Jain Irrigation Systems, NTPC, Jublilant Foods, Punjab National Bank, Emami, Andhra Bank and Allahabad Bank added some support to the markets while, results of Shriram Transport Finance Company, ABB, Canara Bank, Indian Bank, Dr Reddys Laboratories, Apollo Tyres, Union Bank of Indian, Central Bank of India and Bajaj Hindusthan kept the markets under pressure. Coming to the major domestic news for the week, Finance Minister Pranab Mukherjee said in the Parliament on May 07, 2012 that the application of General Anti-Avoidance Rules (GAAR) has been deferred by one year until 1 April 2013, giving some short term respite to the foreign investors, which added support to the markets. Also, the Finance Bill 2012 was passed by Lok Sabha on Tuesday (May 08, 2012) where the FM proposed retrospective changes that will empower the government to tax transactions that have taken place outside the country, but will involve underlying assets located in India. The proposal will have the power to tax retroactively. The Finance Minister had also clarified that the retrospective amendments would not be used to reopen cases where assessments have been completed and it doesn't override the provisions of double taxation avoidance agreements. Global Indices: All the global markets closed in red zone for the week ended. The top three losers were Hang Sang down by 5.32% and Nikkei down 4.55%, Shanghai Comp declined 2.33%. Rest of the indices lied in the range of 0.66% to 1.96% Sectoral and stock screening: All the 13 sectoral indices closed the week in negative note. The top three losers were BSE Power (fell 4.67%), BSE IT (down 4.38%) and BSE Metal (declined 4.31%). And remaining sectors closed below, in the range of 0.05% to 4.07%. Looking at the 'A' group stocks, the top three gainers of the week were Muthoot Finance (up 11.17%), Bharat Petroleum Corporation (rose 7.51%) and Crisil (up 6.82%). The top three losers of the week were IRB Infrastructure developers (down 18.29%), GMR Infrastructure down 17.93% and TTK Prestige (down 17.72%). FII/MF activity: The foreign institutional investors (FIIs) have been the net sellers of the Indian stocks worth Rs1319.50 crore, while the domestic investors were the net buyers of Indian stocks to the tune of Rs26.10 crore during the week till May 09, 2012. Market Outlook: The Indian markets are expected to remain volatile in the coming week. The major trigger for the market will be corporate earnings for Q4 March 2012 and year ending March 2012 (FY 2012) earnings. The major results to be announced will be Larsen & Toubro (L&T), Bajaj Auto, State Bank of India (SBI), Tata Steel and Coal India. On the macro front, monthly inflation data for April 2012 will be released on Monday (May 14, 2012).