Geopolitical tensions put pressure on domestic bourses..
share indices ended lower for the second straight week tracking a sell-off in
global equities amid rising tensions between Ukraine and Russia and after US
President Barack Obama authorized air strikes in Iraq. On the domestic front,
rising crude oil prices raised fears of further widening of fiscal and current
account deficits while Reserve Bank of India's neutral stance on key policy
rates flagging inflation concerns also weighed on investor sentiment in the
week to August 8.
30-share Sensex ended down 152 points or 0.6% at 25,329 and the 50-share Nifty
ended down 34 points or 0.5% at 7,569.
the broader market, the BSE Mid-cap index ended down 152 points or 1.7% at
8,962 while the BSE Small-cap index ended down 63 points or 0.6% at 9,828.
governor Raghuram Rajan kept key interest rates unchanged. The repo rate and
cash reserve ratio (CRR) was unchanged at 8 per cent and 4 per cent, respectively.
However, the RBI cut statutory liquidity ratio (SLR) by 50 basis points to 22%
in an effort to improve liquidity in the system.
shares were among the top Sensex losers during the week on fears that sharp
hike in bond yields on the new 10-year benchmark government bond raised the
risk that their bond portfolio's could take a hit and treasury profits may come
under pressure in the July-September quarter. Axis Bank, ICICI Bank, HDFC Bank
and SBI ended down 1-4% each.
Sterlite was the top Sensex loser down 5%. Reports suggest that the company is
planning to set up a large steel plant in Karnataka at a very huge cost.
& Mahindra was the top Sensex gainer up nearly 5% after an encouraging
performance in the June quarter despite muted volumes in both utility vehicles
(UVs) and tractors. Despite the muted volumes, the company managed to improve
its operating profit by five per cent to Rs 1,419 crore and margins by 56 basis
points (bps) to 14.3 per cent, compared to a year ago.
the Mid-cap segment, Bhushan Steel plunged 45% during the week after the
Central Bureau of Investigation (CBI) on Thursday arrested the company’s, Vice
Chairman and Managing Director, Neeraj Singal, in connection with Rs 50 lakh
bribery scandal involving Chairman and Managing Director of Syndicate Bank S K
Jain. Syndicate Bank ended down nearly 12% lower.
tensions between Ukraine and Russia and the developments in Iraq would continue
to weigh on the domestic markets in the truncated week ahead. The markets will remain
closed on Friday, August 15, on account of Independence Day.
the major companies that will announce their first quarter earnings include,
SAIL, Tata Motors, Coal India, BHEL, ONGC, Tata Steel, IOC, Britannia Ind among
Tuesday the government will release industrial production data for June 2014
and WPI inflation data for July while on Thursday data on CPI inflation for
July will be released.
current levels, we would recommend buying in stocks in sectors like Banking,
NBFCs, Metals, Capital Goods and Infrastructure.