Markets rise 2% this week

The Indian markets snapped their two-week losing streak and closed on a higher note on Greek optimism and declining crude oil prices

Major news for the week

Food inflation at 9.13% versus 8.96%

PFC consolidated net profit up 11% in FY11

SAIL FY11 consolidated net profit declines by 27%

Zee Entertainment FY11 consolidated net profit at Rs625 crore

Reliance Infrastructure, Reliance Communications to move out of Sensex



Indian indices

The Indian markets registered their first weekly gain in three weeks, with support from global stocks that displayed some relief after Greece reached an agreement for an austerity plan to avoid a debt default. A steep fall in crude oil prices also boosted the sentiments, easing worries over inflation and rising interest rates.

Concerns over India- Mauritius tax treaty had battered markets on Monday (June 20, 2011), hitting their lowest close in four months. However, the markets rebounded amid speculation that recent decline was excessive. Investors picked up beaten down frontline stocks, which led the markets to close the week on a strong note.

The Sensex swung around 955 points between a high of 18269 and a low of 17314 and closed the week at 18241, up by 370 points or 2.07%. The Nifty swung about 282 points between a high of 5478 and a low of 5196 and shut the week at 5471, up by 105 points or 1.95%.

Sectoral and stock screening

The major sectoral gainers this week — BSE IT up by 2.97%, BSE Bankex up by 2.5% and BSE TECk rose by 2.12%. The major sectoral losers this week — BSE Realty down by 4.91%, BSE CD down by 2.76% and BSE Power fell by 0.42%.

Top three gainers in ‘A’ group — Jain Irrigation Systems rose by 11.19%, Hero Honda Motors gained by 7.85% and Bhushan Steel went up by 7.79%. Top three losers in ‘A’ group — Lanco Infratech slipped by 23.54%, SKS Microfinance dropped by 16.45% and GVK Power & Infrastructure down by 11.21%.

FII/MF activity

The foreign institutional investors ( FIIs) continued their selling trend and sold Rs1,126 crore in this week. The domestic institutional investors (DIIs) sustained their buying activity and purchased Indian equities worth a net of Rs968.5 crore in this week.

Global indices

The European markets were the losers this week owing to euro zone debt crisis, which include FTSE 100 down by 0.71%, CAC 40 down by 0.94% and Dax 100 down by 0.2%. On the gainers’ side, Shanghai Composite rose the most by 3.91%, then Nikkei up by 3.5% and Nasdaq up by 2.69%.

Outlook

The markets are likely to remain volatile next week ahead of the expiry on the near-month June 2011 derivatives contracts on Thursday (June 30, 2011). Shares of auto, steel and cement firms will be in focus ahead of monthly sales numbers for June 2011, which will start trickling in from Friday (July 01, 2011). On the macro front, investors will watch the HSBC India Purchasing Managers' Index (PMI), which indicates the performance of the manufacturing sector, for June 2011.

Expectations for Q1 June 2011 results will start building as the first quarter draws towards a close. Investors will continue to watch the progress of the monsoon rains. FII flows and developments in the external environment may impact markets.