Comments on market by Mr. Amar Ambani, Head of Research, IIFL – 23rd May, 2013

iiflThe Indian equity market extended its losing streak for the fourth straight trading session. This time though, the decline came amidst a global sell-off.

Stock markets witnessed deeper cracks post minutes of the latest Federal Reserve meet. Fed Chairman Ben Bernanke suggestion that the central bank may begin tapering its bond-buying program later this year sent US markets tumbling.

To compound matters, Bank of Japan announced a two trillion yen or $19bn fund-supply operation.

On the earnings front, India’s largest lender State Bank of India and engineering behemoth Larsen & Toubro disappointed the street with lower than expected Q4 FY13 numbers.

SBI Q4 net profit declined 19% to Rs. 32.99bn from Rs. 40.50bn in the same period last fiscal. Total income rose Rs. 363.31bn as against Rs. 339.6bn in the period under review. While L&T reported a 6.9% year-on-year fall in its Q4 net profit at Rs. 17.88bn on the back of a 9.9% YoY rise in total income at Rs. 206.87bn.

The Sensex ended down 388 points at 19,674 while the Nifty closed at 5,967, down 127 points.

On the road ahead, IIFL’s Amar Ambani said the Nifty could consolidate near 6000 levels in medium-term. “To trend higher, the market would require an improvement in real economic indicators or growth-inducing reforms. Technically, the near term support for the Nifty is placed at 5,940 which is also the 38.2% retracement level from its April lows. A fall below this would lead to a further correction,” he stated.

HDFC, Sun Pharmaceuticals, Tata Motors, HDFC, Cipla, Hindustan Unilever and UltraTech Cement Ltd were among gainers on Sensex and Nifty.

Reliance Infra, JP Associates, State Bank of India, DLF, Ranbaxy, Jindal Steel, Punjab National Bank, Axis Bank, NTPC, BHEL, Bharti Airtel, Mahindra & Mahindra, Bajaj Auto and Gail India were the major losers.

The advance decline ratio was in favour of the bears. 1737 stocks declined against 592 advancing stocks. Only 117 stocks remained unchanged.

The INDIA VIX on NSE shot up 5.6% to end at 18.73. It hit a day’s high of 19.36 and day’s low of 16.96.

Stocks which hit 52-week high during the week were Transchem$, Nestle India, Castrol India, Grandma Trad, Parag Shilpa, Westlife Dev, Swadeshi Inds, Kappac Pharma and Vishnu Sugar among others

Stocks which hit 52 week low during the week were Bombay Dyeing, Binani Inds, Chambal Fert, Wyeth, Manglore Ref, Elantas Beck and Fedders Lloyd.