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Saturday, February 25, 2012

First weekly fall for markets in 2012

The Indian markets broke seven-week winning trend on profit booking. The Sensex fell 2% and the Nifty declined 2.4%.

Headlines for the week

Kingfisher Airlines faces tough times
Citigroup sells HDFC stake
Econet seeks $3.1 billion damages from Bharti Airtel
India’s GDP to grow at 7.1% in FY12: Rangarajan
Jan consumer price inflation at 7.65%
ABB Q4 net profit soars over 9-fold
Ranbaxy Q4 consolidated net loss at Rs2982.76 crore

Weekly Newsletter - Feb 25 2012

We warned about a meaningful correction on Feb. 22. Incidentally, the main indices witnessed second big fall of 2012 on the day. Not only that, the Indian market broke its seven-week winning streak this week. The frontline indices fell for three straight days and logged their first down week of 2012. Traders preferred to book profits in the run up to important domestic events next month.

The fall this week may not necessarily be a bad thing. A pause is always healthy after such a rise. For those who missed the rally, such corrections could be a blessing in disguise. The Indian market could consolidate in a sideways fashion in the near term as uncertainties over the European debt crisis and geopolitical tensions persist.

One should keep a close eye on FII flows, which have been quite robust so far. Q3 GDP data and LTRO-2 by the ECB will among the events to keep on one’s radar for next week. The Centre must not lose any time in accelerating reforms. That will in turn become fuel for our markets.

India's CPI stood at 7.65% in January

Provisional annual inflation rate based on all India general CPI (combined) for January 2012 on a point-to-point basis (January 2012 over January 2011) is 7.65%. The corresponding inflation rates for Rural and Urban areas are 7.38% and 8.25%, respectively. Inflation as measured by the Wholesale Price Index (WPI) declined to a 26-month low of 6.55% in January. The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation releases Consumer Price Indices (CPI) on base 2010=100 for all-India and States/UTs separately for Rural, Urban and Combined every month with effect from January 2011. The General Indices for Rural, Urban and Combined are 115.0, 112.8 and 114.0 respectively. The annual consumer price index (CPI) data released for the first time today measures retail prices in major food groups, fuel, clothing, housing and education across rural and urban India. Provisional annual inflation rates of January 2012 for Rural, Urban and Combined in respect of ‘Food & Beverages’ stood at 4.18%, 3.98% and 4.11%, respectively, said Srikant Kumar Jena, Minister of State (Independent charge), Ministry of Statistics and Programme Implementation. Vegetables were cheaper by over 24 per cent on a nationwide basis in January over the same month last year. Milk & Milk products turned dearer by 16.53% on an annual basis, while the price of Oils and Fats rose by 13.47%. Condiments and Spices turned costlier by 11.83% and Fruits by 10.62%. The inflation numbers for Fuel & Light, Clothing, Bedding and Footwear segments were in double-digits.

Sensex, Nifty near 1-1/2-week closing lows

Key benchmark indices fell for the third straight day to reach their lowest closing level in almost 1-1/2 weeks. The barometer index, BSE Sensex, fell below the psychological 18,000 level as higher oil prices hit sentiment adversely. The Sensex lost 154.93 points or 0.86%, up close to 75 points from the day's low and off about 275 points from the day's high. The market breadth was weak.

India imports about 80% of its total oil consumption and the rise in prices could worsen a widening trade deficit. Oil advanced for the seventh day in a row today, 24 February 2011, the longest winning streak since January 2010, on signs of economic recovery from the US to Germany and concern escalating tension with Iran threatens crude supplies. Nymex crude oil for April delivery was up 35 cents to $108.18 a barrel.

MCX Subscription Oversubscription Details - Retail

Sr.No.CategoryNo.of shares offered/reservedNo. of shares bid forNo. of times of total meant for the category
1Qualified Institutional Buyers (QIBs)216208310619293249.12
1(a)Foreign Institutional Investors (FIIs)43593366
1(b)Domestic Financial Institutions(Banks/ Financial Institutions(FIs)/ Insurance Companies)51320550
1(c)Mutual Funds7818888
2Non Institutional Investors926607139313544150.35
2(b)Individuals (Other than RIIs)64728672
3Retail Individual Investors (RIIs)21620825219063424.14
3(a)Cut Off46194600
3(b)Price Bids5996034
4(a)Cut Off42276
4(b)Price Bids1758
Updated as on 24 FEB 2012 at 2030 hrs