The markets in the week gone by behaved exactly as expected and failed to recover ground. Infosys results were slightly below expectation but the reduction in guidance for the full year 2012-13 spooked the stock and the markets. The share was a big loser and the sentiment was badly affected. Later on in the day, TCS announced better than expected results but the same was a little too late to rally the market. The BSE SENSEX lost 307.42 points or 1.75 per cent to close at 17,213.70 points. The NSE NIFTY lost 89.70 points or 1.69 per cent to close at 5,227.25 points. The broader indices like the BSE500, BSE200 and BSE100 lost 1.53 per cent, 1.60 per cent and 1.64 per cent respectively. The BSE MIDCAP lost 1.05 per cent while the BSE SMALLCAP lost 1.25 per cent. The best performing index was the BSE FMCG, which was almost flat losing a mere 0.01 percent. The worst performing were the BSE IT down 5.20 per cent, BSE METAL down 3.28 per cent and BSE AUTO 1.87 per cent. In individual stocks, there were few gainers but Jaypee Infratech was a big gainer up 7.66 per cent. IT stocks were big losers with Infosys down 8.84 per cent, Wipro down 8.39 per cent and Tata Steel down 4.87 per cent.
Infosys has made a second big downward gap between Rs 2444-2280. As per the gap theory, they come in groups of three and the current one is the second gap. This gap has come after three months and this was after the first one happened in the last quarter or fourth quarter of 2011-12 results. It is not a good sign and indicates weakness in the stock TCS also announced its results on the same day and they were better than what the street expected.
It now appears that the mantle of leadership has shifted with TCS becoming the leader as far as IT stocks are concerned instead of Infosys the earlier leader. 'GAAR' seems to be going nowhere and the PM and acting FM has appointed a four-member committee to look into the controversial bill and make suggestions about the same. Post this committee's recommendations a decision would be taken by the then FM. It now all but appears certain that there is no way the controversial bill could be introduced in the form it was presented in the budget.
The monsoon continues to be a source for worry but is not yet written off. FIIs were buyers on every single day of last week and bought shares worth Rs 1,815 crore last week while domestic institutions sold shares worth Rs 1,261 crore. The Indian Rupee strengthened during the week closing at Rs 55.15. Results from four major companies were announced last week, which included Infosys, TCS, HDFC and HDFC Bank. The results from Infosys were disappointing while those from TCS were above par. HDFC and HDFC Bank turned in a good set of numbers but the share prices did not react.
Global markets were weak for the first four days and the US markets rallied strongly on Friday. Looking at the global cues one should expect markets to move up on Monday when trading begins for a new week. The BSE SENSEX in the week ahead has support at 17,149 points, then at 16,989 points, then at 16,815 points and finally at 16,602 points. It has resistance at 17,310 points, then at 17,470 points, then at 17,631 points and finally at 17,952 points. The NSE NIFTY has support at 5,207 points, then at 5,156 points, then at 5,095 points and finally at 5,045 points. It has resistance at 5,257 points, then at 5,307 points, then at 5,348 points and finally at 5,443 points. Expect the markets to rise at the beginning and with not much news flow expected play the results as they are declared. It should be a range bound week ahead of us.
Arun Kejriwal is founder of the Mumbai-based advisory firm Kejriwal Research & Investment Services Pvt Ltd. Readers are invited to read more about these and other issues on his website http://ak57.in Disclaimer: No financial information whatsoever published anywhere in this newspaper should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is for educational and information purposes only and under no circumstances should be used for actual trading or making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment or trading decisions, based on information published.