Weekly Market Analysis 13-08-2021

Benchmark Indian indices Nifty and Sensex witnessed robust gains as both the indices closed at record highs with the Sensex crossing 55,000-mark and the Nifty ended above the 16,500 level. The gains were due to positive sentiments in global markets and rising optimism in the domestic market amid fear of rising COVID cases.

For the week, Sensex rose 2.1% to 55,437.3 and Nifty advanced 1.8% to 16,529.1. Top 5 gainers in Nifty were Tech Mahindra (9.4%), HCL Technologies (6.6%), Power Grid (5.6%) Bharati Airtel (4.8%), TCS (4.6%). Top 5 losers were Eicher Motors (-7.3%), Shree Cements (-6.3%), Dr.Reddy’s Laboratories (-2.8%) Grasim Industries (-2.2%) and Hero MotoCorp (-2.2%)

Meanwhile, a recent circular on additional price surveillance from BSE had a negative effect on smallcap and midcap stocks, and a few stocks recouped their losses after BSE’s clarification on Wednesday, but overall midcap and small cap indices ended in the red for the week. However, indices representing industry heavyweights advanced during the week.

BSE Small Cap index was down 1.7% to 26,355.2 and Nifty SmallCap 100 lost 2.2% to 10,200.2. Among midcap indices Nifty Midcap 50 fell 2.2% to 7,514.7 and BSE Mid-Cap fell 1.1% to 22,941.

Among sectoral indices, Nifty Pharma was the biggest loser as it lost 3.2% during the week, followed by Nifty PSU Bank (-2.2%) and Nifty Realty (-2.2%). Aurobindo Pharma and Lupin dragged the pharma index as both the stocks plunged more than 15% during the week.

Nifty IT and BSE Telecom were top sectors that gained 4.4% and 2.8%, respectively, on a weekly basis.

Economic Indicator

India’s retail inflation, measured by the Consumer Price Index (CPI), eased to 5.59% in July, from 6.26% in June, according to government data. The fall in CPI was due to a decline in food inflation to 3.96% in July, from 5.15% in June. 

The Index of Industrial Production (IIP) which is a measure for factory output improved to 122.6 in June, up 13.6% on a year-on-year basis. Factory output had contracted 16.6% in the same month of FY21 and rose 29.3% in May of FY22.

In addition, data released by the Commerce and Industry Ministry showed exports rose to $35.43 billion in July, up from $23.64 billion in the year-ago period. Growth in exports were led by gems and jewellery, petroleum products, readymade garments, chemicals, engineering goods, electronic goods 

Imports also rose 62.9% to $46.4 billion in July FY22, from the corresponding period last year. Crude oil and gold imports dominated the import bill, in addition to chemicals, precious stones, iron and steel and electronic goods. 

Global Markets

In the US markets, the Dow added 0.87%, the S&P 500 gained 0.71% and the Nasdaq slipped 0.09% for the week. US equities rose during the week boosted by investor confidence in the country’s economic recovery and strong results from corporate America. The passage of the large infrastructure bill and inflation rising at a slower pace added positivity to markets. 

Chinese stocks rose marginally amid worries over increased government clampdown of the country’s technology and private education industries would spread to other sectors. For the week, the Blue-chip CSI 300 index added 0.5% and the benchmark Shanghai Composite Index gained 1.7%. Japan’s Nikkei also rose 0.56% for the week amid an increase in coronavirus cases forced the government to impose restrictions.