Weekly roundup: Sensex tanks 476 pts after 3-week gains

The S&P BSE benchmark Sensex snapped a three-week strong winning spree and dropped 476 points due to profit-booking from operators in view of expiry of the futures and options May contract and ahead of the Reserve Bank of India's policy review meet next week.

Market sentiment remained weak as overseas investors were net sellers in the first four sessions of the week.

The Sensex resumed higher at 24,693.89 and once again crossed 25,000 mark to quote at 25,175.22 on strong initial buying before the swearing-in of Narendra Modi as Prime Minister on Monday.

The 30-share index, however, declined afterwards to 24,163.62 on profit-booking before finishing the week at 24,217.34, showing a loss of 476.01 points, or 1.93 per cent over the previous week's close.

In the last three weeks, the key BSE barometer had gained a whopping 2,289.46 points, or 10.22 per cent.

The NSE 50-share Nifty tumbled by 137.15 points, or 1.86 per cent, to end at 7,229.95. It had gained 672.30 points, or 10.04 per cent, in the previous three weeks, which were dominated by election-related developments.

"Investors preferred to remain on sidelines ahead of GDP data, which came at 4.7 per cent for 2013-14 announced on late Friday (after market hours), and RBI policy review next week," said Jayant Manglik, President-retail distribution, Religare Securities.
Going ahead, RBI's monetary policy on June 3 and the first Budget of the Modi Government shall be major triggers for the market, according to Rakesh Goyal, Senior Vice- President, Bonanza Portfolio. .

"Possibly, profit booking coupled with disappointment over the appointment of key ministries could have led to market decline. All indices were in red except IT and FMCG," said Sanjeev Zarbade, Vice President- Private Client Group Research, Kotak Securities.

Foreign institutional investors (FIIs) were the net sellers of Rs 732.50 the first four days of the week as per the SEBI's record. However, they bought shares net Rs 2,977.62 crs on May 30 as per the provisional figure of stock exchange.

Meanwhile, India's economic growth remained subdued at 4.7 per cent in 2013-14 and at 4.6 per cent in the fourth quarter of the financial year, mainly due to a decline in manufacturing and mining output.

Major losers were Gail India (11.36 per cent), BHEL (11.12 per cent), SBI (7.74 per cent), ONGC (7.18 per cent), Coal India (6.64 per cent), HDFC (6.05 per cent), Reliance Ind (5.56 per cent), Infosys (4.08 per cent), Maruti Suzuki (4.84 per cent), Tata Motors (3.70 per cent), ICICI bank (2.90 per cent), Hindalco Ind (2.83 per cent) and Bajaj Auto (1.54 per cent).

However, HUL rose by 7.07 per cent followed by M&M 6.25 per cent, Dr Reddy's Lab 6.10 per cent, SSLT 4.35 per cent, Sun Pharma 3.88 per cent, Wipro 3.27 per cent and Larsen 2.47 per cent.

Among the major indices CD dropped by 6.34 per cent, Oil&Gas 5.99 per cent, Power 5.28 per cent, Realty 43.18 per cent, Bankex 3.25 per cent and Metal 1.96 per cent.

Mid-cap and Small-cap indices also dropped by 2.32 per cent and 1.23 per cent, respectively due to fresh selling from retail investors.

However, FMCG rose by 1.03 per cent and IT by 0.18 per cent.

The total market turnover at BSE and NSE was Rs 28,453.44 and Rs 1,18,105.08 crs respectively as against the previous week's level of Rs 26,841.37 crs and Rs 1,29,868.91 crore.

Forex: In line with fall in equity markets, the Indian rupee also broke its last 4-week of rally against the American currency amd tumbled by 59 paise to paise to two-week low of 59.11 per dollar on month-end dollar demand from importers.

After appreciating for four weeks in a row, the Rupee depreciated on month end dollar demand from importers, mainly from oil refiners. Also the local equities traded weak on profit booking further dented the Rupee movement.

The rupee opened higher at 58.45 per dollar as against the last weekend's level of 58.52 per dollar at the Interbank Foreign Exchange (Forex) Market and moved up further to 58.41 per dollar on initial dollar selling from banks on expectation of good foreign capital inflows.

However, it dropped to 59.22 per dollar on fag-end dollar demand from importers before settling the week at 59.11 per dollar, showing a loss of 59 paise or 1.01 per cent.

It had dropped by 208 paise or 3.43 per cent in the previous straight four weeks.

FIIs were the net sellers for 4 days in a row in last week. Now investors are waiting for Reserve Bank of India's policy review next week which will show the road ahead. The trading range for the Spot USD/INR pair is expected to be within 58.50 to 59.50.

Recommended to be cautious and Sell USDINR (Futures) on rise with appropriate stop loss as overall Rupee is expected to appreciate. Pivot Point for the Pair is at 58.98 and below is the Support and Resistance levels.