Profit sales, inflation fears stunt Dalal street

The markets had a quiet week with benchmark indices loosing early week gains on uncertainty in global markets and inflation worries as the week came to a close.

Markets closed the week on a flat note with the benchmark BSE Sensex ending at 17.574.53, up 3.71 points.

The NSE Nifty closed up 6.45 points for the week at 5269.05.

However, the broader market outperformed the large-caps as BSE Midcap rose by 1.53% while the BSE small-cap index gained 1.62%.

“The dip seen in the market’s performance this week can be attributed to the fact that investors were looking to book profits and inflation issues also played its part. Things are looking good on the domestic as well as global front ahead”, said DD Sharma, senior vice-president at Anand Rathi Financial Services.

Experts believe broader indices are currently more attractive as their valuations are cheaper relative to large caps.

Sectorwise, nine of thirteen sectors closed the week in the green.

The consumer durables sector was the top gainer this week as it rose 3.03% on account of improvements seen in rural purchasing power backed by good monsoon.

The oil & gas sector was the next best performer, gaining 3.02% as oil stocks rallied on Friday following the government’s decision to deregulate petrol prices and increase prices of other fuels like diesel, kerosene and LPG.

Bharat Petroleum (BPCL) gained 18.98% over the week followed by ONGC which went up by 5.90%.

Hindustan Petroleum (HPCL) was the top gainer among the Nifty juniors as it rose by 18.22%. The so-called defensive sectors like healthcare and FMCG also saw buying interest as they rose by 2.97% and 2.79%, respectively.

The information technology space fell 1.43% as the dollar strengthened over the week. However, experts are positive on the sector on account of good outsourcing opportunities in the existing global scenario.

The banking sector along with telecom and capital goods also closed with gains.

The market made a strong start this week as it rose 305.73 points on Monday on account of commodities rallying sharply. China had announced over last weekend that it would end the yuan’s 23-month old peg to the dollar, thereby inducing flexibility in its foreign exchange rates.

However, the euphoria was short- lived and markets corrected over the next four sessions with the Sensex shedding 302.02 points, neutralising Monday’s gains.

Oil companies rose the most this week. Among the losers, HCL Technologies lost the most, going down 7.90% followed by Wipro and Jindal Steel, down 4.96% and 4.50%, respectively.

In the banking sector, State Bank of India (SBI) fell by 3.03%. Kotak Mahindra bank along with HDFC bank lost 2.89% and 2.21%, respectively.

Tata Motors and Tata Consultancy Services fell by 4.1% and 3.15%, respectively. The market saw heavy FII inflows of Rs 4,137.18 crore over the week. On the domestic front, inflation could be the only show-stopper, analysts said.

Though the market may have stayed flat this week, the same cannot be said of its performance over the past month. The Sensex has gained 1552.05 points or 9.69% till date, since May 25.