The Sensex and the Nifty rose 3.08% and 3.20% respectively on account of positive economic data pertaining to trade deficit, RBI’s decision to improve liquidity in the banking system and strong Infosys Q2FY14 results in the last week. The trade deficit narrowed down to USD 6.7 billion in September 2013 (30 month low) from USD 10.9 billion in August 2013 as merchandise exports rose 11.15% to USD 27.68 billion and imports declined 18.1% to USD 34.44 billion on a year on year basis. Trade restrictions brought down the Gold and Silver imports to USD 0.8 billion in September 2013 compared to USD 7.5 billion and USD 8.4 billion in April 2013 and May 2013 respectively.
RBI reduced the Marginal Standing Facility (MSF) rate by 50 basis points (bps) to 9% from 9.5% with an immediate effect along with term repos of 7-day and 14-day tenor for a notified amount equivalent to 0.25% of net demand and time liabilities (NDTL) of the banking system through variable rate auctions on every Friday to improve the liquidity in the monetary system.
Infosys results came in line with the market expectation and the positive trigger was mainly the revision in the full year USD revenue growth guidance from 6%-10% range to 9%-10% range for FY 2013-14.
The US Government continued its shutdown amidst concerns over the debt ceiling deadline that would come up in the next week on 17th October 2013. The debt ceiling is of concern when the US government reaches its borrowing limit and cannot spend further for necessary expenses. The debt limit is likely to be increased in the next week to help the government in running its operations smoothly along with a possibility of discontinuing the partial shutdown. The Dow Jones Industrial Average rose 1.09% and the NASDAQ declined 0.42% on a week on week basis.
Crude oil prices rose 1.66% to USD 111.28 /bbl and gold prices declined 2.97% to USD 1272 /Oz on a week on week basis.
Industry and Stock Specific trends
The sectoral indices gained last week with only the S&P BSE PSU index closing flat with a 0.25% increase on a week on week basis. S&P BSE Bankex, IT, Auto and Oil and Gas indices increased 4.10%, 6.14%, 4.29% and 1.44% respectively in the last week.
Infosys stock rose 8.57% to Rs.3274 in the last week on the back of the company performing in line with the market expectation. Infosys reported a 1.6% increase in the consolidated net profit to Rs.2401 crores from Rs.2369 crores on a year on year basis and an increase of 1.39% from Rs.2374 crores on a sequential quarter on quarter basis.
Wipro stock rose 1.12% to Rs.489 in the last week as the company announced the appointment of Senior Vice President Mr Shaji Farooq as the global head of its Banking, Financial Services and Insurance (BFSI) segment.
Tata Motors stock rose 10.12% to Rs.385 and also reached a record high of Rs.389.50 in the last week as Jaguar Land Rover (JLR) reported 17% growth to 43,181 vehicles in September 2013 over September 2012.
Coal India Ltd. declined 8.84% to Rs.282 in the last week as recent media reports suggest that the government is likely to dilute 5% stake in the company via a follow on public offer in December 2013.
HDFC Bank rose 2.76% to Rs.660 and ICICI Bank rose 7% to Rs.997 due to RBI announcing a slew of measures to improve liquidity in the banking system.
Table 1. Weekly Market Movement
Table 2. Weekly Gainers and Losers