The markets behaved on expected lines and were weak. They gained and lost on alternate days with the losses coming on Monday, Wednesday and Friday. The gains came in on Tuesday and expiration day, Thursday. The days the markets fell, the losses were far greater than the days of recovery and in the end the BSE SENSEX lost 676.08 points or 4.13 per cent to close at 15,695.43 points, while the NSE NIFTY lost 195.75 points or 3.99 per cent to close at 4,710.05 points.
Tension over Iran contributes to uncertainty: Iranian MPs chat
during a parliament session in Tehran yesterday. Iran's parliament voted
to expel Britain's ambassador in retaliation for fresh Western sanctions
imposed over Tehran's nuclear programme. pic/AFP
In the process of the week's fall we have broken the low of the year and are now at levels last seen in November 2009. The BSE MIDCAP lost significantly less at 1.82 per cent, while the BSE SMALLCAP lost 2.15 per cent. The big loser amongst the sectoral indices was BSE METAL, which lost 5.35 per cent. Within the metal index SAIL lost 12.27 per cent, JSW Steel lost 8.88 per cent, Hindalco lost 8.l16 percent and Sterlite lost 7.53 per cent. Amongst other losers were Reliance Industries, which lost 6.68 per cent, ICICI Bank 6.62 percent and Hero Honda 6.18 per cent.
Aviation stocks were in the news with the government talking about FDI being permitted in aviation. This led to Kingfisher gaining 12.68 per cent, while Jet Airways gained 9.38 per cent. In other news, microfinance listed entity SKS Microfinance founder Vikram Akula has decided to step down as CMD of the company, but it did not help the company's stock price, which fell 11.68 per cent to close at Rs 108.10. Tata group has chosen Cyrus Mistry as its new Chairman and has thus set at rest issues about succession in the group. Cyrus's sister is married to Noel Tata who was being tipped to become the Chairman and is the son of Pallonji Mistry. The Parliament session is once again reaching nowhere and to show that the ruling party of the day is pro-reform the cabinet cleared the company's law and also allowed 100 percent FDI in single brand retail and 51 per cent in multi-brand retail. The decision to allow outlets to open in a particular place is a state subject and there are diverse views among the people who govern the states. It appears as of now Punjab. Orissa, Maharashtra, Rajasthan and Haryana are the states in favour of allowing these outlets. The issue will be hotly debated and with the UP CM opposing the entry battle lines are being drawn. UP goes to polls in the early part of the calendar year 2012 and will be a keenly fought election.
FIIs were big sellers and sold stock worth Rs 5,322 crore in the week while domestic institutions chipped in with purchases of Rs 4,669 crore. The Indian rupee continued its downward trend and closed the week at Rs 52.23. The week just ended saw the expiry of the November series and it has been a big fall with the high during the month being 5,399.70 points on the NSE NIFTY. It closed for expiry at 4,756.45 points losing almost 640 points or almost 12 per cent. The global scene continues to be grim and the Euro crisis never ending. Even Germany seems to be having its share of problems and during last week, an auction of bonds was nearly cancelled for want of takers. Italy has raised six-month debt at a staggering 6.5 per cent. All this does not augur well for the stock markets. To add to the precarious condition in just about two to three weeks' time fund managers globally will look forward to the much-awaited Christmas and New Year holidays. The markets will closely follow European developments and react to any negative news.
The primary markets appear to have gone to sleep and there is virtually no activity in the segment. There are of course two bond issues, which have opened during the just concluded week where they offer tax exemption upto Rs 20,000 under section 80CCF. The two bonds are from IDFC and L&T Infra. The bonds offer 9 per cent interest and have the option of buyback after the mandatory lock-in period of five years would expire. Coming to our markets, the week will be choppy and there would be sharp intraday moves which move neutralise the same on a weekly basis. The net change at the end of the week may not be significant but there would be a hint of a negative bias in the markets. The BSE SENSEX has support at 15,597 points, then at 15,455 points, then at 15,351 points, then at 15,207 points and finally at 15,024 points. It has resistance at 15,842 points, then at 16.087 points, then at 16,168 points, then at 16,371 points and finally at 16,664 points. The NIFTY has support at 4,679 points, then at 4,607 points, then at 4,538 points, then at 4,454 points and finally at 4,360 points. The NSE NIFTY has resistance at 4,751 points, then at 4,828 points, then at 4,875 points, then at 4,985 points and finally at 5,045 points. This is not the time to do bottom fishing. The market needs to get out of the uncertainty that surrounds it. remember that December results are not going to be great and there would be plenty of time to buy share available.