Sensex, Nifty down 1.5% last week; IIP, inflation eyed

Indian equity markets settled sharply lower for the second consecutive week with Sensex and Nifty slipping below their psychological marks (19,600 and 6,000) on weak global cues and uninspiring results. A downgrade in GDP at 5% announced this week had disappointed the market sentiment. Most of the sectoral indices traded weak led by BSE Consumer durables, PSU and Metal.

CSO issued dismal growth forecast of 5% during current financial year as against market expectations of 5.5% growth forecast. During financial year 2011-12, India registered economic growth of 6.2%. Indian government has successfully offloaded 9.5% stake in the state run power producer NTPC on Thursday via offer for sale (OFS). OFS has received good response, which was subscribed 1.7 times. It received bids for 1,328 million shares as against 783.2 million shares on offer at indicative prive of Rs 145.91. At indicative price, the government is likely to get around Rs 114.3 billion from share sale. The government had fixed the floor price at Rs 145 a share. The 30-share index, Sensex fell sharply 296.42 points or 1.5% over previous week to 19,484.77. On the other hand, the broad based NSE Nifty dropped 95.40 points, or 1.59%, to 5,903.5. Meanwhile, BSE Mid and Small-cap indices plunged 3.04% and 3.72% respectively. All sectoral indices at the BSE ended weak barring IT and Teck which gained 1.73% and 0.68% respectively. Top losers were BSE Consumer durables (5.16%), PSU (4.67%), Metal (4.3%), Realty (2.7%), Power (4.25%), Bankex (2.5%), Oil & gas (3.82%), Capital goods (2.64%), Healthcare (2.54%), FMCG (1.93%), and Auto (0.7%).''Benchmark indices may turn volatile in the coming week amid various economic data points to be announced. The IIP numbers will be announced next week. The other data points are WPI, import-export numbers for the month and CPI. A host of results will continue to flow in. But the market looks unlikely to stage any rally in the coming week,'' said Amar Ambani, head of research, IIFL.While commenting on technical outlook for the coming week, Rakesh Goyal, senior vice president, Bonanza Portfolio said, ''Nifty has closed near a very crucial support level of 5,900. At the same time, the trendline has been broken in today's session signaling further selling is likely in coming week. A break of trendline along with a break of support level of 5,940 level, both are bearish indicators. It is to be seen now, whether in coming week Nifty is able to hold above 5,900 level or not. Weak GDP numbers have dampened the market sentiment, however, any positive cues from global markets may help in recovery. In coming sessions, 5,900 level shall be crucial deciding level in near term, and index is likely to witness further selling below this level. Below 5,900, likely support levels are 5,850-5,820, while above 5,950, likely target is 6,000-6,025.''