Markets rise after a 3-week slide

The Indian markets surged this week after falling for three straight weeks as investors went on bargain hunting. The Sensex rose 2.13% and the Nifty gained 2.27% for the week ended August 03, 2012. Major Healines of the Week gone by: RBI leaves key rates unchanged June exports falls 5.45%, imports slips 13.46% Manufacturing PMI slumps to 8-month low RBI’s cut in SLR does not impress banks BSE to exclude 52 stocks from September 28 Indian Indices: The Indian markets bounced back this week as investors picked up stocks that were beaten the most in recent days. Tremendous buying interest throughout the week helped the markets rise after three consecutive weeks of losses. The Indian equities were volatile throughout the week. Markets ended this week on a buoyant note led by strong global cues. Expectations from the Federal Reserve and European Central Bank were also high in July. However, the Fed and ECB failed to match up to the market expectations as they did not announce any stimulus measures. The Key benchmark indices rose in three out of five trading sessions, while Nifty held on to the key 5200 level. The Midcap and Smallcap indices as they were the major gainers this week, BSE MidCap index rose by 3.14% and the BSE SmallCap index surged by 2.96%. Both these indices outperformed the Sensex. The Sensex rose 358.74 points or 2.13% to settle at 17,197.93 while Nifty surged 115.85 points or 2.27% to settle at 5,215.70. Major events of this week: 1. The Reserve Bank of India on Tuesday kept its repo rate unchanged at 8% but announced a cut in its statutory liquidity ratio ( SLR) of one percentage point to 23%. The central bank also kept the cash reserve ratio (CRR), or the percentage of deposits that banks have to keep with RBI, unchanged at 4.75%. 2. The HSBC India’s Composite Output Index fell to 54.4 in July from 55.7 in June. July's expansion is the slowest in three months, HSBC said. 3. The European Central Bank ( ECB) has kept the main euro zone interest rate at a record low of 0.75%. 4. India's exports contracted for the second consecutive month in June by 5.45%, y-o-y, to $25 billion on account of growing economic uncertainties in the Western markets. Imports dipped more sharply, by 13.46% to $35.37 billion during the month, compared to $40.8 billion in June 2011, resulting in a narrow trade deficit of $10.3 billion. On the Home ground: The India Meteorological Department (IMD) on Friday, for the first time, officially hinted at a drought-like situation, saying the southwest monsoon over India in 2012 is likely to be deficient at below 90% of the Long Period Average (LPA). The company and Telephonics Corporation (Telephonic) on August 01, 2012 announced the formation of a joint venture (JV). The JV to be called Mahindra Telephonics Integrated Systems will provide the Indian Ministry of Defence and the Indian civil sector with radar and surveillance systems, identification friend or foe (IFF) devices and communication systems. In addition, the JV intends to provide systems for air traffic management services, homeland security and other emerging surveillance requirements. Weekly market trend from July 30-August 03, 2012: Trading this week began on a strong note. On July 30, 2012, the Key benchmark indices gained, with firm global stocks and buying of Indian stocks by foreign institutional investors (FIIs) which boosted the sentiment. The BSE Sensex surged 304.49 points to close at 17,143.68, while the Nifty advanced 99.95 points higher at 5199.80. Indian markets traded higher on July 31, 2012 post firm opening of the European indices and markets reentered positive territory to close the trade in the green zone. The Sensex ended at 17236.18, up by 92.50 points while Nifty closed at 5229, up by 29.20 points. Key benchmark indices eked out small gains on August 01, 2012, after witnessing intraday volatility. The Sensex closed at 17257.38, up by 21.20 points while the Nifty rose by 11.50 points to close at 5240.50. On August 02, 2012, the Key benchmark indices snapped four day winning streak, as investors nervously awaited the latest policy decision from the European Central Bank. The Sensex shut shop at 17224.36, down by 33.02 points while the Nifty fell 12.75 points to close at 5227.75. On August 03, 2012, the key indices fell for the second straight day. The Sensex recovered after strong opening of the European equities which helped the markets to recover most of its losses as they progressed towards the closing bell. The Sensex ended at 17197.93, down by 26.43 points while Nifty closed at 5215.70, falling by 12.05 points. Global indices: All the global markets closed on a positive note baring Nikkei which fell by 0.13% Top gainers: CAC40 jumped by 2.87%, FTSE100 gained by 2.85%, DAX100 advanced by 2.63%, Hang Seng surged by 2.03%. Sectoral and stock screening: All the 13 sectoral indices closed the week on a positive zone, Top gainers - BSE Power jumped by 4.97%, BSE CG gained by 4.70%, BSE Realty surged by 4.38% and BSE HC advanced by 4.28%. Looking at the 'A' group stocks, the top three gainers of the week were United Breweries which was up by 19.66%, Essar Oil up by 14.64% and TTK Prestige up by 13.40%. The top three losers of the week were Marico slipped by 3.92%, Bharti Airtel down by 3.44% and Motherson Sumi Systems declined by 3.30%. FII/MF activity: The foreign institutional investors (FIIs) have been the net buyers in Indian stocks to the tune of Rs2945.30 crore, while the domestic investors sold Indian shares worth a net of Rs69.80 crore during the week till August 04, 2012. Market Outlook for the coming week: Investors' focus remains on Q1 earnings. Following are the companies which will post their first quarter earnings in the forthcoming week. DLF and SAIL will unveil Q1 results on August 06, 2012. Mahindra & Mahindra and Bharti Airtel will unveil Q1 results on August 08, 2012. Tata Motors and Ranbaxy Laboratories unveil quarterly results on August 09, 2012. State Bank of India, Sun Pharmaceuticals Industries, Siemens and BPCL announce quarterly results on August 10, 2012. After the Reserve Bank of India ( RBI) kept repo rate unchanged last month, the spotlight will shift on the newly appointed Finance Minister, P Chidambaram, who is anticipated to announce few reforms and policy changes against a backdrop of slowing growth and a weak monsoon. Marketmen are widely expecting that the government will announce few reforms after the election of new vice president next week. Election to the post of vice president will be held on 7 August 2012 and the results would be out on the same day.