Friday, May 24, 2013

Weekly Market Commentary - May 20 - May 24, 2013

This week saw even bigger movements in Sensex than previous week. Sensex moved almost 850 points between its low and high this week. Ben Bernanke's comments on halting its bond buying program aka stimulus spending send global markets in tailspin. Another issue that was on the mind of Indian investors was falling INR as US economic recovery gains pace, strengthening US dollar. Sensex fell by 2.9%, Nifty fell 3.3% while CNX Midcap dropped by 4.5%.

Monday - Sensex down by 0.3%, Nifty down by 0.5%, Midcap down by 0.7%
Markets tried to maintain its bullish momentum from previous week, but failed. Though market largely ignored the S&P downgrade warning, stocks went down as latest Ranbaxy scandal put the entire Indian healthcare sector on dock, which led the losses on Sensex.

Tuesday - Sensex down by 0.6%, Nifty down by 0.7%, Midcap down by 0.9%
Markets were nervous as bulls turned cautious ahead of the Ben Bernanke comments on Wednesday. In the recent times, FIIs buying has pushed the Sensex closer to its highs, with net buying of record $13.5bn this year alone. This highly speculative buying, abetted by easy liquidity, makes the Indian markets heavily dependent on any newsflow from US Fed.

Wednesday - Sensex down by 0.2%, Nifty down by 0.3%, Midcap down by 1.1%
Sensex was in negative again, as L&T results, barometer of performance of domestic economy, were weaker than expected. Company pared its orderbook guidance which raised the doubts on underlying economy fundamentals. Markets remained on shaky ground as investors booked profits ahead of Fed meeting.

Thursday - Sensex down by 1.9%, Nifty down by 2.1%, Midcap down by 2.1%
Sensex slumped around 400 points as Fed Chairman Ben Bernanke hinted at turning off the spigot of easy liquidity. Things were made worse as Rupee weakened on USD strength and SBI and BHEL posted weak 4Q results.

Friday - Sensex up by 0.2%, Nifty up by 0.3%, Midcap up by 0.2%
Markets tried to regain some ground as investors turned to bargain hunting. Overall breadth remained positive.

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