Weekly review: Sensex down by 60 pts

Analysts said investors sold across-the-board in the early part of the week which was attributable to the expiry of the derivative contracts for May on Thursday.

However,short covering on Thursday and follow-up buying on the next day helped Sensex to recover major part of its early losses.

The Sensex closed the week at 18,266.10,a fall of 59.99 points or 0.33 per cent over the previous week’s close. Intra-week,it dipped to a three-month low of 17,786.13. Fitch had downgraded Greek’s debt rating over the last week-end while Standard & Poor downgraded outlook for Italy’s rating that led to concerns over the sovereign debt crisis in Europe and impacted the market sentiment across the globe.

However,most of the markets overseas surged after mid-week on speculations that China would increase purchases of Euro bonds.

The National Stock Exchange,the broader NSE 50-share Nifty eased by 10.25 points,or 0.19 per cent to end the week at 5,476.10.

Petro-chem giant RIL rose smartly by 2.70 per cent during the week,while ONGC spurted by 3.27 per cent on reports that its subsidy burden might reduce following possible hike in diesel prices in June.

As a result,BSE-Oil & Gas index rose by 224.68 points,or 2.41 per cent and was the top gainer among the sectoral indices.

Stock markets have been under pressure most of this year,about 11 per cent down so far,due to high inflation,soaring oil prices,rising interest rates and below-expected fourth quarter earnings by key corporates.

“Indian markets got trapped in the worldwide selling of risky assets and the general flight-to-safety trend. The uptick in the Indian market in the last two days can be termed as more of a technical recovery after the recent weakness.

It is a minor pullback and not a trend reversal,as the fundamentals are still weighed down by high inflation and rising interest rates,” said IIFL Head of Research (India Private Clients) Amar Ambani.

However,the market shrugged off the rise in food inflation which rose to 8.55 per cent for week ended May 14 from 7.47 per cent in the preceding week.

Among the sectoral indices,the BSE-Power went down by 2.22 per cent followed by BSE-IT (1.86 per cent),BSE-CG (1.75 per cent) and BSE-Auto (1.45 per cent).

The BSE-IT plunged on reports that software bellwether Infosys Tech has received a legal notice from US district court over the use of its business visas.

The smart gains by RIL,ICICI Bank,ITC,HUL,Hero Honda,ONGC,Tata Steel,Hindalco and Reliance Com were offset by fall in Tata Motor,BHEL,NTPC,Tata Power,TCS,Infosys Tech,SBI,Wipro and Rel Infra.

Tata Motors was the top loser from the Sensex during the week after the company announced late Thursday that the current macro economic factors have the potential to adversely impact commercial vehicle demand.

Overall,16 out of the 30 Sensex scrips closed with gains,while others finished with losses.

Tata Motor tumbled by 6.86 per cent,BHEL (6.67 per cent),SBI (3.77 per cent),TCS (2.97 per cent),NTper cent (2.60 per cent),Tata Power (2.55 per cent),Infosys (2.20 per cent),REL Infra (1.99 per cent),Wipro (1.30 per cent),Bajaj Atuo (1.21 per cent) and DLF (1.08 per cent).

However,ONGC rose by 3.27 per cent,Hindalco (2.76 per cent),Hero Honda (2.73 per cent),RIL (2.70 per cent),HUL (2.45 per cent),ICICI Bank (2.37 per cent),ITC (1.78 per cent),M&M (1.65 per cent) and Tata Steel (1.21 per cent).

The total turnover at BSE and NSE rose to Rs 13,782 crore and Rs 55,258 crore respectively compared to Rs 12,734 crore and Rs 49,242 cr last week.

Forex: In a two-way trade during the week under review,the Indian rupee remained under pressure for the fourth week in a row to end down by another 15 paise to a 10-week closing low of 45.16/17 against the Greenback following sustained dollar demand from importers amid stronger dollar overseas.

At the Interbank Foreign Exchange (Forex) market,the domestic unit opened the week sharply lower at 44.22/23 a dollar from last weekend’s close of 45.01/02 and touched a low of 45.42 in a mid-week due to sluggish local stocks.

Good dollar demand from importers,mainly oil refiners,to meet their monthly requirements too weighed on the rupee in the first couple of days.

However,dollar selling in the later part of the week by exporters after smart rebound in the euro and also in other counterparts,partially aided the rupee recovery.

Smart bounce back in Indian equities in last two days of the week too helped the rupee to recover major part of its early losses. The benchmark Sensex,which was down by about 480 points in first three days,rebounded smartly to end the week lower by nearly 60 points.

The rupee later recovered to a high of 45.12 before settling the week at 45.16/17,still showing a loss of over 0.3 per cent.

Pramit Brahmbhatt,CEO,Alpari (Forex) India said that rupee continued its decline this week also. USD INR traded bullishly & made a low of 45.42 taking cues from the international market where dollar traded strong against major currencies in the first half of the week but in the last two days dollar lost its way & traded bearishly.

Month end dollar demand and few defence related payments during the week also acted against the Rupee. However negative economic data coming from the US in the latter part of the weak put a lot of pressure in the dollar helping Rupee to recover from its low. The crucial support for the pair is at 45.00 below which we could see further downside,he added.

The dollar index,which tracks its performance against a basket of major currencies,traded bearishly throughout the week as Euro,GBP,Yen & other currencies traded strong against the greenback simultaneously. Dollar also hit an all-time low against the Swiss franc. Looking towards the global scenario we can expect EUR,GBP & YEN to trade weak in coming days,which will further depreciate the Rupee near to 46 levels,he further commended.

The Reserve Bank of India fixed the reference rates for US dollar at 45.21 and Euro at 64.40 respectively,as against Rs 44.93 and Euro 64.34 last weekend.

The rupee moved down sharply further against the pound sterling to end the week at Rs 74.13/15 from last weekend’s close of Rs 73.03/05,while turned negative against the euro to Rs 64.25/27 from 64.01/03 previous week end.

It also fell back against the Japanese Yen to Rs 55.71/73 per 100 yen from last weekend’s close of Rs 55.09/11.

The rupee premium for the forward dollar ended mixed on alternate bouts of buying and selling.

The benchmark six-month forward dollar premium payable in October edged up to 120-121 paise from 119-120 paise last weekend while far-forward contracts maturing in April declined to 250-252 paise from 255-257 paise.