The Sensex and the Nifty rose 1% and 1.36% respectively on account of positive economic data that was reported in the last week. The Current Account Deficit (CAD) for Q2FY14 was reported at USD 5.6 billion as compared to USD 21.8 billion for Q1FY14 on account of a lower trade deficit that saw exports rising by 12% to USD 81.2 billion and imports declining by 4.8% to USD 114.5 billion on a year on year basis. The CAD narrowed down to 1.2% of the GDP in Q2FY14 as compared to 4.6% in Q1FY14. The Capital Account saw outflows of USD 5.3 billion in Q2FY14 as compared to inflows of USD 20.5 billion in Q1FY14 on account of portfolio outflows of USD 6.6 billion seen in the quarter.
The HSBC manufacturing Purchasing Managers Index (PMI) rose to 51.3 in November 2013 as against 49.6 in October 2013 and recorded the highest level since March 2013. The exit polls for the State Elections have predicted a victory for the Bharatiya Janata Party (BJP) in the states of Chattisgarh, Madhya Pradesh, Delhi and Rajasthan with the results expected on 8th of December 2013 also boosted sentiments for the markets.
The economic data for the US economy was positive. The Non-Farm Payroll data for November 2013 was reported at 2,03,000 jobs compared to a previous revised 2,00,000 jobs for October 2013. The Unemployment rate declined to 7% in November 2013 as compared to 7.3% in October 2013. The Jobless Claims were reported at 2,98,000 in the November 30 week as compared to a revised 3,21,000 in the previous week. The Dow Jones Industrial Average declined 0.41% and the NASDAQ rose 0.07% on a week on week basis.
The manufacturing PMI for China was reported at 50.8 for the month of November 2013 as compared to 50.9 for the month of October 2013. The Chinese economy has seen sustained growth momentum in the manufacturing activity in the recent period as the index level is seen to be consistently above the level of 50.
Crude oil prices rose 1.46% to USD 111.61 /bbl and gold prices declined 1.92% to USD 1229 /Oz on a week on week basis. Gold prices declined in the last week on account of positive data that was reported for the US economy. The focus has now shifted to equity markets as the yellow metal is seen as a safe haven during times of uncertainty.
The equity derivatives market saw rise in open interest in Nifty Index futures by 7.38% while implied volatility of Nifty index options increased week on week. FIIs were net buyers to the tune of Rs.3528 crores in the equity market in the last week. Domestic Institutional Investors were net sellers to the tune of Rs.2726 crores in the equity market in the last week.
Industry and Stock Specific trends
The sectoral indices rose last week with only the S&P BSE Auto index closing negative with a marginal 0.19% decline on a week on week basis. S&P BSE IT, Bankex, PSU and Oil and Gas indices rose 0.08%, 4.97%, 2.62% and 0.95% respectively in the last week.
Tata Power stock rose 10.82% to Rs.88.10 on a week on week basis on account of insurance claimed by the company for the fire which broke out at Mundra Project in November 2013.
Stocks of Jindal Steel and Power and Tata Steel rose 9.95% and 5.43% to Rs.283.50 and Rs.423 respectively on a week on week basis as positive manufacturing data was reported for the Chinese Economy.
BHEL stock rose 9.8% to Rs.171.35 and Larsen and Toubro stock rose 5.1% to Rs.1096.55 as L&T Construction company reported new orders worth Rs.1471 crores in the last week.
Wipro stock rose 4.76% to Rs.493 on a week on week basis on account of the IT heavyweight shifting focus from manufacturing of PCs, laptops and servers to concentrate further on IT solutions and services segment.
Hindustan Unilever stock declined 5.65% to Rs.561 on a week on week basis as Unilever Plc. aims to cut individual products by 30% by end of 2014 to become more efficient and manage global economic slowdown.
Table 1. Weekly Market Movement
Table 2. Weekly Gainers and Losers