Markets continued to weigh down by RBI policy actions, which have raised the cost of doing business on the country. Banks, realty, metals, all rates sensitive stocks, were badly hit this week. RBI’s battle against the falling rupee has been futile as currency is back at 61 against the dollar. Sensex was down 3%, Nifty was down 3.5% and CNX Midcap 5.9% this week.
Monday - Sensex down by 0.8%, Nifty down by 0.9%, Midcap down by 1.3%
Markets continued their downward trend with investors acing cautious ahead of RBI meeting on Tuesday. RBI has tightened liquidity environment in a bid to save rupee from falling further. Many investors are nervous wondering whether RBI will continue its stance and increase the rates to make rupee investment attractive for FIIs, as SBI chairman suggested. Investors are also anticipating announcement related to sovereign debt offering country might plan to plug the deficit gap.
Tuesday - Sensex down by 1.3%, Nifty down by 1.3%, Midcap down by 2.4%
In its policy announcement, RBI kept all key rates unchanged (repo rate at 7.25%, CRR at 4%), but revised the country’s GDP growth projection for FY14 downwards from 5.5% to 5.7%. RBI also indicated its reservation about issuing of sovereign debt, calling the timing now not right. Markets plunged after the policy announcement and rupee tumbled down to 61 mark.
Wednesday - Sensex down by 0.0%, Nifty down by 0.2%, Midcap up by 0.2%
Sensex ended up flat after falling almost 220 points in its initial sessions. FM who indicated more liberalization policies are under consideration and encouraged PSUs to borrow from abroad saved the markets. Govt is also considering raising import duty on non-essential luxury items to contain CAD.
Bharti Airtel was among the top gainer, with the company showing growth signs in its ARPUs, which increased, to INR200 for 1Q14, +16 y-o-y, EBITDA margin increased to 32.3% from 29.6% a year back.
Thursday - Sensex down by 0.1%, Nifty down by 0.2%, Midcap down by 1.4%
Indian markets rallied during their early sessions with their Asian peers as China reported better than expected PMI data while US GDP growth also beating street estimates. However, later in the day, weaker manufacturing data put the brakes on the rally and drag down the markets back in the red zone.
Financial Technologies, promoter of MCX, leading commodity exchange of the country, tanked by 65% today as govt asked its National Spot Exchange to not to launch new products, following with firm (NSEL) decided to suspend trading and postponed settlement of all 1 day forward contracts.
Friday - Sensex down by 0.8%, Nifty down by 0.9%, Midcap down by 1.1%
Markets saw heavy selling across metals, power, realty and PSUs as concerns over rise in cost of operations in tight monetary environment has made investors bearish over these counters.
Financial Technologies fell another 23% as crisis over National Spot Exchange has dealt to commodity investors sentiments. Power Grid Corp fell 11% after firm announced plans to dilute equity to fund its investment plans.
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