12:24
Moneycontrol BureauInvestors turned cautious during the week and sold shares to cash out ahead of two key events: the Reserve Bank of India 's third-quarter monetary-policy review on December 18 and the US Federal Reserve's meeting on December 17-18.
After a spectacular rally that took the market to all-time highs (21,483.74 on Sensex and 6,415.25 on Nifty) on the first day of the week -- driven by a clear verdict in the state elections -- the market got caught in a bear trap for rest of the week.
The 30-share BSE Sensex snapped a two-week winning streak, falling 280.95 points or 1.34 percent to 20,715.58. The 50-share NSE Nifty closed at 6,168.40, down 91.50 points or 1.46 percent. The two benchmarks had rallied around 4 percent in the previous two weeks.
Next week, the Federal Reserve is widely tipped to roll back a part of the massive quantitative easing it unveiled in response to the global financial crisis of 2008 while closer home, the RBI is likely to up key policy rates to counter strong recent inflation data. A tightening liquidity situation, arising from the possibility of either event taking place, is expected to weigh on stocks.
"The outperformance of India relative to other parts of Asia in last two-three months will possibly wind down quite significantly," Manishi Raychaudhuri of BNP Paribas Securities told CNBC-TV18 in an interview.
A five to seven percent correction from the present levels could be on the cards, he added.
Fed and RBI
However, even as there is widespread consensus the Fed would start to scale back the USD 85-billion-a-month in bond-buying it has resorted to to hold down long-term interest rates, some experts believe it could turn out not to be the case.
"We don't expect the beginning of tapering [of the stimulus] in December," Raychaudhuri said. It has become increasingly clear from the Fed's incumbent chief and the appointed successor that it has to be absolutely certain about the sustainability of economic recovery before it attempts any kind of liquidity contraction, he added.
He added tapering could start with a USD 15 billion decline in the bond purchases from the March meeting. "It will possibly go down to zero in successive stages by the end of 2014 or early 2015."
Chris Wood of CLSA shared a similar view, suggesting that Janet Yallen, the likely next Fed chief, will not be in a hurry to move.
"The Fed's favourite inflation measure, the core PCE deflator, is still well below the central bank's 2 percent target, even as the average hourly earnings growth did not accelerate last month," Wood said.
Most experts are, however, unanimous on the likeliness of the second event, a repo-rate hike of minimum 25 basis points, or 0.25%.
News last week and the next
Retail inflation, as measured by the consumer price inflation data, jumped to 11.24 percent in November from 10.17 percent in previous month and industrial production for October contracted by 1.8 percent as against a growth of 2 percent in earlier month. Both data points were worse than expected.
India's trade deficit narrowed to USD 9.22 billion in November versus USD 10.56 billion a month ago and USD 17.2 billion last year on the back of falling imports.
Ratings firm Standard & Poor's said India's sovereign rating could come under pressure if the general elections slated to be held in May next year throw up a fractured verdict -- a possibility as it appears today -- or with a government unable to push through reforms.
Key events on the cards, apart from the Fed and RBI meetings, are: a meeting by Chinese politburo this weekend to finalise growth target for the next year; a US Senate will vote on the USD 1.01 trillion budget agreement following its approval by the House; and the release of final third-quarter growth numbers by the US and the UK. Indian companies will also announce third quarter advance tax numbers. (Source: Aditya Birla Money).
Stock-specific action
BSE Power Index fell the most, losing 4.6 percent followed by Capital Goods with a 4 percent loss. Bankex plunged 3 percent, and Auto and Capital Goods were down 2 percent each.
However, in the falling market, Information Technology Index bucked the trend, rising 1.6 percent and FMCG gained 0.3 percent. Gains in IT stocks were on account of Goldman Sachs report saying in FY15 revenue growth for Indian IT companies can stand at 15 percent versus 9 percent in FY13.
The biggest losers were BHEL , JSPL, IDFC , NTPC , Jaiprakash Associates , IndusInd Bank , State Bank of India, BPCL , Punjab National Bank and Tata Motors that plunged between 5-10 percent.
In case of Tata Motors, raising of FY15 capex guidance to GBP 3.5-3.7 billion by Jaguar Land Rover hammered the stock, though it rebounded on Friday on short covering.
The fall in NTPC was led by CERC's new draft regulations for FY15-19. Analysts expect around a 10 percent cut in earnings of the company due to draft, but the company does not think so.
Sesa Sterlite, Wipro and HCL Technologies topped the buying list, rising around 5 percent. HCL Technologies touched a record high of Rs 1,190 apiece on Friday.
The broader markets too followed the same trend with the BSE Midcap and Smallcap indices tripping 1.35 percent and 1.52 percent, respectively during the week.
Shares of Adani Enterprises , Sintex, IRB Infrastructure, Union Bank of India, YES Bank, IFCI , HDIL and Adani Power were down 5-9 percent while Delta Corp rallied 9 percent.
Anda sedang membaca artikel tentang
Weekly wrap: Stocks fall 1.4%; Fed, RBI tightening in focus
Dengan url
https://rokokkanker.blogspot.com/2013/12/weekly-wrap-stocks-fall-14-fed-rbi.html
Anda boleh menyebar luaskannya atau mengcopy paste-nya
Weekly wrap: Stocks fall 1.4%; Fed, RBI tightening in focus
namun jangan lupa untuk meletakkan link
Weekly wrap: Stocks fall 1.4%; Fed, RBI tightening in focus
sebagai sumbernya
0 komentar:
Posting Komentar