Weekly: Markets end higher amid volatility
Markets ended the week ended August 17 on a positive note amid a volatility. The Sensex advanced 0.76% or 133 points to close at 17,691 and the 50-share Nifty advanced 46 points or 0.86% to end at 5,366.
On the macro economic front, the investor sentiment was boosted by the better-than-expected July inflation numbers. Inflation declined to 6.87% in July as the rate of price rise of the food articles category eased a little. The decline in the inflation also renewed the hopes of a rate cut by the Central Bank in its upcoming policy review.
Inflation, as measured by the Wholesale Price Index (WPI), was 7.25% in June. In July last year, it was 9.36%.
However the mood was dampened a bit after, the Comptroller and Auditor General of India (CAG) on Friday accused the government of allocating coal blocks, ultra mega power projects and land for the Delhi airport at a fraction of market prices, potentially causing a total Rs 2.18 lakh-crore loss to the exchequer.
Private companies labelled as beneficiaries in the three CAG reports tabled on Friday in Parliament reacted sharply, with Reliance Power saying the audit observations did not take into account the “national interest to augment domestic coal production". In its defence, the GMR-controlled Delhi International Airport Ltd (DIAL) cited a November 2006 Supreme Court verdict that had upheld the bid process as “valid and correct". The stocks of these companies fell sharply.
On the global front, German Chancellor Angela Merkel suggested that she supports the European Central Bank's efforts to tackle the euro zone debt crisis.
Merkel said declarations by ECB President Mario Draghi, who outlined conditional plans at the start of the month to buy bonds of troubled euro zone governments, were "completely in line" with the approach taken by European leaders and urged the bloc to now act swiftly to tackle its woes.
Back home, Reliance Industries was the top gainer for the week. The stock jumped 4.2% to close near its 5-month high at Rs 815 after the oil ministry agreed to conditionally approve the capital expenditure plan of over $1 billion for KG-D6 gas block.
Meanwhile, India's largest private sector company is in talks with British oil giant BP about buying the British oil company’s petrochemical plant in Malaysia, the report suggests.
Mahindra & Mahindra also advanced nearly 4% to close at Rs 767. reports suggest that the company said it has planned an investment of Rs 450 crore this year and is set to launch about ten models of tractors in the next two years.
Shares of Tata Motors also jumped 3.6% during the week to Rs 240 after it reported 21% year-on-year growth in its global sales at 101,605 units in July. Highest in past four months. The company had sold 85,392 units in the same month of previous year.
HDFC, Bharti Airtel, Cipla, Bajaj Auto, Dr Reddy's Labs, Infosys, Larsen & Toubro, HUL, Coal india and BHEL were also among the gainers, up 1-3% each.
On the other hand, Hindalco from the metal space was the top loser from the heavyweight space. The stock slipped 7.2% to Rs 114 after it reported Rs 425 crore in standalone net profit for the April-June quarter, down 34 per cent over the corresponding quarter a year ago, on higher operational expenses.
ITC fell 2.2% to Rs 262 on concerns about regulatory action at home after reports suggested that Australian court approved logo ban on tobacco packs from December 1.
Jindal Steel, Sun Pharma, Sterlite Indiustries, Tata Steel, Tata Power, NTPC, HDFC Bank, GAIL India and TCS also ended weaker.
On the sectoral front, led by the gains in the index heavyweight Reliance Industries, the BSE oil & gas index advanced 2.3% or 191 points to close at 8,500 levels. Auto, consumer durables, capital goods, IT, healthcare and bankex indices advanced 0.6-1% each.
On the contrary, the BSE metal index slipped 1.8% or 193 points to 10,327. Power, FMCG and realty indices edged lower.
The broader markets were in-line with the benchmark indices. The BSE mid-cap index advanced 1% or 58 points to 6,158 and the small-cap index advanced 65 points to 6,615.
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