Sensex ends week on slightly lower note; mid & small-caps plunge

Indian equity markets settled marginally lower for the third consecutive week as investorsremained cautious ahead of Budget. The market ignored lower-than-expected inflationand disappointingindustrial production figures.

Mid and small-cap underperformed their larger counter-parts. Realty, capital goods and Powerdropped the most in the sectoralindices.

The 30-share index, Sensex declined 16.62 points or 0.09% over previous week to 19,468.15. On the other hand, the broad based NSE Nifty dropped 16.10 points, or 0.27%, to 5,887.4. Meanwhile, BSE Mid and Small-cap indices fell 1.91% and 3.73% respectively.

Top losers in the BSE sectoral indices were Realty (5.39%), Capital goods (3.98%), Power (2.79%), Metal (1.61%), Consumer durables (1.04%), Oil & gas (0.98%), TECK (0.56%) and FMCG (0.20%). However, BSE PSU (0.34%), Healthcare (0.32%), Bankex (0.31%) and Auto (0.24%) witnessed a marginal rise.

''With almost two weeks for the mega event- The Union Budget, and with the quarterly results season almost coming to an end. Traders would change their focus on the forthcoming weeks. On the domestic front the next trigger for the markets would be the January Eight Infrastructure Industrial data, fourth quarter GDP data and January fiscal deficit data,'' said Amar Ambani, head of research, IIFL.

Rakesh Goyal, senior vice president, Bonanza Portfolio said, ''Expectations and speculations ahead of Budget session, starting from February 21, may lead to some recovery. Investors must play cautiously as volatility could be high in coming weeks."

"Nifty has next immediate support at 5,825 level and some recovery may be seen from these levels. Market trend will depend much on the Budget outcomes which shall be presented on Feb 28 i.e. end of this month and sector-specific movement may be witnessed. Global factors will also be important. In coming sessions, 5,825 level shall be crucial deciding level in near term, and index is likely to witness further selling below this level. Below 5,825, likely target levels are 5,770-5,730, while above 5,950, likely target is 5,970-6,000,'' Goyal said on technical outlook.

India's headline inflation, based on monthly WPI, declined to 6.62% in January 2013 as compared to 7.18% for the previous month. It was below market expectations of 7%.

India's industrial production, as represented by the Index of Industrial Production (IIP), contracts 0.6% in December 2012 as against market expectations of 1.1% growth.

The November 2012 IIP figure has also been revised downwards to negative 0.8% from earlier estimate of 0.1% de-growth.

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