Weak Week! Mkts drop 2%; Nifty slips below 5300 mark

After gaining for four consecutive weeks, the Indian markets changed track this week on global woes to end nearly 2% lower for the week ended Aug 31, 2012. Major Headlines of the week: India’s Q1 GDP at 5.5% vs 5.3% in Q4FY2012 India forex reserves slips to $288.92 billion: RBI Telenor can bid for 2G auction only via Uninor: Court RBI scraps SBI suggestion to abolish CRR Metal shares lose shine on weak Chinese data Indian Indices: After rallying sharply in the previous four-weeks, the Indian markets reversed the gaining trend by ending the week ended August 31, 2012 in red. Volatility ruled the markets this week on account of global woes both in local and overseas indices. In the week gone by, markets witnessed a heavy sell-off. This week's loss wiped out all the gains of the previous four weeks as profit booking was intense. Week on Week (W-o-W), the Nifty lost 2.38% while Sensex slipped 1.99%. The key benchmark indices fell in four out of five trading sessions. Events like the Q1 GDP data, global worries, commodity news, and rating downgrades were the major focus of this week. The BSE Sensex fell 353.65 points or 1.99% to close at 17,429.56 and NSE Nifty fell 128.20 points or 2.38% to settle at 5,258.50. Major events of this week: India's economy grew at a higher-than-expected 5.5% for the quarter ended June, 2012 government data showed on Friday. From agriculture to services, every section of the Indian economy is slowing down. Though the gross domestic product ( GDP) in the first quarter of FY13 came in at 5.5%, which was ahead of the consensus estimates of 5.3%. The gross domestic product ( GDP) came in at 8% in the April-June quarter of 2011-12. Further adding, rate sensitive shares witnessed profit booking as April-June GDP dashed the hopes of rate cut by the central bank. From the global front, the US Federal Reserve Chairman Ben S. Bernanke hinted the new policy measures to stimulate the US economy at the Jackson Hole meeting on Friday. Weekly market trend from August 27 - August 31, 2012: Trading for the week started on a weaker note. Key benchmark indices declined on August 27, 2012, as higher crude oil prices sparked concerns about fiscal deficit and current account deficit. Weakness in global stocks also dampened sentiments on the domestic bourses. The Sensex closed at 17678.81, down by 104.40 points and the Nifty fell 36.45 points to close at 5350.25. On August 28, 2012, the key indices declined as the coal war between the Bharatiya Janata Party (BJP) and Congress stalled Parliament for the sixth consecutive day. Weakness in global stocks also weighed on the domestic bourses. The Sensex slipped 47.10 points to close at 17,631.71 and the Nifty declined 15.65 points to settle at 5,334.60. On August 29, 2012, the domestic markets dropped as the parliamentary logjam expected to force the Government to defer decisions on pending reforms and there were also worries of a possible downgrade of India's debt ratings if the fiscal deficit doesn't improve. The Sensex closed at 17490.81, down by 140.90 points and the Nifty fell 46.80 points to close at 5287.80. On August 30, 2012, the Indian markets emerged from a gloomy session of the opening bell and shut shop with smart gains on the August F&O expiry day. The recovery in the Indian equities came despite of steep fall across the Asian markets and a weak opening in the European markets. The Sensex closed at 17541, up by 51 points and the Nifty gained 27 points to close at 5315. Key benchmark indices on August 31, 2012, hit to its lowest level in 4th week, after the latest data showed that the India's GDP growth languished around its lowest in three years in Q1 June 2012. The Sensex closed at 17380.75, down by 160.89 points and the Nifty fell 56.55 points to close at 5258.50. Following are the stocks/ sectors which were eyed in week gone: 1. Metals shares witnessed a major setback this week, on worries that demand would slowdown further after China's major industrial enterprises registered a decline of 5.4% in profits during the month of July indicating signs of a slowing economy. China is a major consumer of metals in the world. Jindal Steel slumped 11.4%, Sterlite Industries dropped 14.3%, Tata Steel fell by 6.5% and Hindalco closed 6.5% lower for the week ended. 2. Auto share declined on worries that August sales would be lower on account of less demand for cars because of high interest rates on auto loans and rising fuel prices. Owing to this stocks like Maruti Suzuki fell by 4.3%, Tata Motors declined 5%, Hero MotoCorp dropped 7.7% and Bajaj Auto ended 5.6% lower for the week gone by. 3. Realty shares witnessed the selling pressure on rising inventory levels of residential premises due to lower demand on account of high interest rates. IndiaBulls Realty ended down 10.8%, DLF fell 5.6%, HDIL dropped 9.5% and Unitech ended 9.1% lower. Global indices: All the global markets closed on a negative note this week baring DAX100, which ended flat. Nikkei fell by 2.54%, Shanghai Composite slipped 2.13%, Hang Seng declined by 2.00%, FTSE100 slid by 1.13%, CAC40 down by 0.59%, Dow Jones fell by 0.51% and the Nasdaq declined 0.09%. Sectoral and stock screening: Among the 13 sectoral indices, eleven sectors closed the week on a negative zone, Top gainers were - BSE FMCG which jumped 1.05%, BSE HC gained 1.02%. Top Losers were - BSE Metal fell by 7.05%, BSE Realty down by 5.01% and BSE CG declined by 4.85%. Looking at the 'A' group stocks, top three gainers of the week were Pipavav Defence which was up by 12.24%, United Breweries up by 12.2% and Coromandel International up by 8.84%. The top three losers of the week were JP Power which slipped by 18.36%, Jain Irrigation down by 15.43% and Sterlite Industries declined 14.3%. FII/MF activity: The foreign institutional investors (FIIs) have been the net buyers in Indian stocks to the tune of Rs3716.50 crore during the week, while the domestic investors sold Indian shares worth a net of Rs496.20 crore during the week till August 30, 2012. Market Outlook: The Indian markets are likely to be volatile next week. Automobile and cement stocks will be focus as companies from these two sector start unveiling monthly sales volume data for August 2012 from Saturday, September 01, 2012. Market Economics will unveil HSBC India Manufacturing Managers' Index (PMI) for August 2012 on Monday, September 03, 2012. On Wednesday, September 05, 2012, Market Economics will unveil HSBC India Services PMI for August 2012. On the Global front: European Central Bank (ECB) will hold its monthly policy meeting on euro area interest rates on Thursday, September 06, 2012. Also the German Chancellor Angela Merkel will hold a meeting with Spanish Prime Minister Mariano Rajoy on Thursday, September 06, 2012.