The Indian markets slump extending losing run for the third consecutive day, as rate hike fears in China and Irish’s debt woes weigh.
The BSE Sensex slumped 848.07 points or 4.04% to 20,156.89 in the week ended Friday, 12 November 2010. The S&P CNX Nifty tumbled 240.8 points or 3.81% to 6,071.65.
MAJOR HEADLINES: IIP at 4.4%, lowest in 15 months.
Oil India Q2 net profit soars 27%; the stock closes 1.73% down.
Educomp Solutions Q2 consolidated PAT at Rs58 crore; the stock ends 8.24% lower.
Nifty November 2010 futures were at 6,083, at a premium of 11.35 points over spot closing of 6,071.65. Turnover in NSE's futures & options (F&O) segment jumped to Rs 192604.43 crore from Rs 125099.27 crore on Thursday, 11 November 2010.
Reliance Industries November 2010 futures were at premium at 1,067.95 compared to the spot closing of 1,060.
ICICI Bank November 2010 futures were at premium at 1,209.15 compared to the spot closing of 1,201.50.
Bharat Heavy Electricals October 2010 futures were near spot price at 2,383.20 compared to the spot closing of 2,383.95.
MARKET SENTIMENT: The market breadth was weak as losing stocks outdid the gaining ones over thrice. Out of the 3,117 stocks on the BSE, 2,263 fell while 752 rose; 101 stocks traded unchanged.
BOND MARKET: India’s 12-year bonds headed for the first weekly loss since the period ended October 22 on speculation that investors will sell the notes to make room for purchases at a government debt auction today. India’s rupee declined the most in three weeks on concern that leaders from the Group of 20 nations will be unable to reach agreement on exchange-rate manipulation and global trade imbalances at ongoing talks.
Foreign funds have been the key drivers of the recent market rally which bought the key benchmark indices to a striking distance of their record highs hit in January 2008. Foreign institutional investors' inflow in November 2010 totaled Rs 17,268.80 crore (till 11 November 2010). They pumped Rs 1,30,191.90 crore in the Indian equity market in the calendar year 2010. In dollar terms, the net equity inflows in 2010 now stands at a record $28.68 billion, above last year's $17.45 billion. On the other hand, domestic institutional investors sold shares worth Rs 1159.41 crore till date in November 2010.
THE WEEK AHEAD: Activity of institutional investors, liquidity scenario and global and domestic economic data will dictate the market trend in the forthcoming week. The wholesale price index for the month of October to be announced on Monday, 15 November 2010 will be closely watched.
A section of the market is worried that a strong equity issuance pipeline over the next six months will soak liquidity from the secondary equity markets. Indian companies are estimated to raise about Rs 80000 crore from equity and debt issue over the next three to six months. After Power Grid Corporation of India, Steel Authority of India and Indian Oil Corporation among others are lined up to float their follow-on public offers.
Poor Industrial Production data also dragged the bourses lower. India's industrial output in September 2010 rose at a much slower-than-expected 4.4% from 8.2% a year ago, government data released on Friday, 12 November 2010 showed. The September IIP data is the lowest in 15 months. Meanwhile, the index of industrial production for August was revised upwards from 5.6% to 6.9%.
