INDIAN MARKET PERFORMANCE DURING THE WEEK ended 23rd Nov 2013

The Indian markets suffered severe jolt in the passing week with two straight days of butchery that led both the
benchmark indices lower to their two months low level. While, there was not much on the domestic front, the
trade was highly dominated by the global cues, as the minutes of Fed’s October meeting stated that many
officials at the central bank think that it could decide to slow the pace of purchases at one of its next few
meetings. There was wide based fear among the emerging markets related to liquidity that they have been
getting due to the Fed’s easy monetary policy. Currencies, including the Indian rupee too came under pressure
as the dollar strengthened on Fed’s indication. Though, markets got a jubilant start after a long weekend with
bulls going berserk and benchmarks registering a three digit rally on Monday taking cues from US Federal
Reserve chair nominee Janet Yellen’s indication that she will continue to support the economy with stimulus
measures. Reserve Bank of India’s announcement of purchasing bonds worth Rs 8,000 crore during the week
under the open market operations (OMO) to inject liquidity in the system too supported the markets. The
markets managed to hold their gains next day after PMEAC Chairman C Rangarajan stated that country’s
current account deficit (CAD) will be contained well below the targeted limit. However, the next two sessions
were worst for the Indian markets and the benchmarks were savaged, losing more than what they have
gathered in first day’s rally. Final day of the week was a bit volatile and the markets despite a good start could
not hold on to it, giving up all the gains by last to snap the week lower by around a percent.
During the week Indices, Sensex shaved off 182.03 points to 20,217.39 Nifty plunged by by 60.70 points to
5,995.45, while Bank Nifty down by 133.85 points to 10,677.35, CNX IT down by 76.55 points to 8,785.45, and
CNX mid-cap down by 66.95 points to 7,449.40. The BSE Mid-cap index was up by 13.23 points to 6,154.28,
while the Small-cap index up by 37.94 points to 5,994.11. On the sectoral front, Capital Goods up by 182.10
points at 9,065.85, Realty up by 5.41 points at 1,309.98 and Oil & Gas up by 21.55 points at 8,419.65 were the
only gainers on the BSE sectoral space, while Consumer Durables down 130.07 points at 5,622.04, Auto down
237.37 points at 11,841.63, Healthcare down 180.78 points at 9,465.36, FMCG down 85.83 points at 6,365.96
and Teck down 54.39 points at 4,723.05 were the top losers on the BSE sectoral front.
Gail India up by 2.12% was the top gainer on Nifty for the week - Gail India is planning to sell 1 million tonnes
of liquefied natural gas (LNG) per year sourced from the United States through its Singapore-based trading
arm. The company is also keen to acquire upstream assets in Tanzania and plans to set up floating LNG regasification
terminal in southern Indian state of Andhra Pradesh along with GDF Suez and Shell.
Cairn India up by 2.06% was another top gainer on the Nifty - Shares of Cairn India gained as the company is
going to consider share buyback on November 26, 2013. Bajaj Auto down by 6.93% was the top loser of the
week on Nifty - The company has registered a 6% drop in total sales to 385,323 units in October 2013 against
411,502 units in October 2012. The sales of the motorcycles decreased by 4% and stood at 348,323 units in
the month under review against 361,186 units in October 2012. Ultratech Cement down by 6.18% was another
major loser on the Nifty - Ultratech Cement has reported a fall of 29.44% in its PAT at Rs 937 crore for H1FY14
as compared to Rs 2327.09 crore for the same period in the previous year.

INDUSRY & ECONOMY NEWS
Observing indications of rebound in domestic economic growth, the World Bank President Jim Young Kim has
said that Indian economy is likely to improve in the third quarter of current fiscal. The World Bank expectation
came in line with Finance Ministry, which has said the economy’s growth will pick up in the second half and
record a growth of 5-5.5 percent in 2013-14. Responding to questions on slowed growth in developing
countries, Jim Young Kim has said that growth in the emerging economy would pick up to over 5 percent over
the next year. However, the developing countries are unlikely to go back to the 10 plus growth rate, which was
experienced before the economic recession in the US.
WORLD MARKET BEHAVIOUR DURING THE WEEK
US MARKET:
The US markets continued its momentum in the passing week as investors reconsidered their concerns about
the Federal Reserve’s potential reduction in its bond-buying program. Janet Yellen, President Barack Obama’s
nominee to be the first chairwoman of the central bank, stated that a strong majority on the Federal Reserve’s
policy-setting committee believes that the central bank’s unprecedented asset purchase programs have been
effective. Yellen repeated the Fed’s statement that asset purchases are not on a preset course and the decision
on whether to reduce the pace of the purchases will remain contingent on the economic outlook and the Fed’s
assessment of the costs and benefits.
President Barack Obama stated that US can cut the deficit and spur economic growth at the same time, and
that short-term deficits aren’t the nation’s primary fiscal concern. The Fed minutes however stated that many
officials at the central bank think it could decide to slow the pace of purchases at one of its next few meetings.
The minutes showed that central bank officials are looking for ways to exit or at least slow down the
controversial program in fairly short order. By a 9-to-1 vote, the Fed on October 30 continued the $85 billionper-
month asset-purchase program, otherwise known as QE3, and made little changes to the language in the
statement. Minutes from the October 29-30 meeting showed that officials considered reducing the size of the
asset-purchase program even before an unambiguous further improvement in the labor-market outlook was
apparent.
There were some encouraging reports on economy front; the number of new US applications for unemployment
benefits fell by 21,000 to 323,000 in the week ended November 16, putting new claims at their lowest level
since late September. The average of new claims over the past month, a more reliable gauge than the volatile
weekly number, dropped by 6,750 and stood at 338,500. Markit’s US index of manufacturing purchasing
managers rose to 54.3 in a preliminary November reading, an eight-month high, from a final reading of 51.8 in
October. The US wholesale prices fell a seasonally adjusted 0.2% in October marking the second straight
decline and reflecting the lack of inflationary pressure in the US economy. Separately, US consumer prices fell
slightly in October because of a decline in energy costs, pulling down the annual pace of inflation to the lowest
rate since 2009.

EUROPEAN MARKET:
The European markets traded mostly flat for the passing week after the Organisation for Economic Cooperation
and Development (OECD) enlightened that the US and British economies speeded up slightly in the third
quarter but expansion in several other economies slowed, leaving OECD-area growth at 0.5%. The recovery of
euro zone and wider European Union economies slowed down from the second to third quarters, with the
French and Italian economies shrinking. Output by the euro zone rose by 0.1% and in the European Union by
0.2%, down from growth rates of 0.3% in the second quarter. This latest data is in line with several recent
signs that the euro zone’s recovery from crises is weak and fragile.
Growth in the euro zone powerhouse Germany slowed sharply to 0.3% from 0.7% in the second quarter. The
French economy slipped backwards, contracting by 0.1% having expanded by 0.5% in the second quarter. The
latest data also showed that in Italy, activity shrank for the ninth quarter in a row but with the pace of
contraction slowing to 0.1% compared with 0.3% in the previous quarter.
The euro zone’s current account surplus narrowed unexpectedly in September. The euro zone current account
recorded a seasonally adjusted surplus of EUR13.7 billion in September, down from a surplus of EUR17.9 billion
in August, whose figure was revised up from a previously reported surplus of EUR17.4 billion. The trade surplus
widened to a seasonally adjusted EUR14.3 billion in September from EUR12.3 billion in August. Manufacturing
activity in the euro zone expanded in line with expectations in November. The euro zone manufacturing
purchasing managers’ index inched up to a seasonally adjusted 51.5 in November from a final reading of 51.3
in October.
ASIAN MARKET:
The Asian markets mostly ended the week on a positive note with Japanese and Chinese market showing
maximum gains. Though in latter part of the week there was some concern too on US Fed’s renewed talk of
tapering. However, by the end the major indices managed to end in green, extending their gains for another
week. Hong Kong’s Hang Seng Index was up by over 6 percent this week to reach an eight-month high.
Chinese market rejoiced after the ruling Communist Party unveiled its most sweeping reform agenda in more
than 30 years, after a meeting of key party leaders in Beijing last week. The agenda aims to transition China to
a more free-market consumer economy with fewer social controls. On the economic front, the plans include
reducing the power of giant state-owned companies, removing a swathe of price controls, phasing out caps on
interest rates and moving towards yuan convertibility. More broadly, the plans also outline loosening the onechild
policy, abolishing the controversial “re-education” labor camps and introducing steps toward an
independent judiciary. In separate development China’s consumer confidence index stood at 110 in the third
quarter, steady from the second quarter and up from 106 in the third quarter of 2012.
The Japanese market surged during the week on the back of weak yen which boosts the profit of exporters.
Also, though the Bank of Japan held off announcing any fresh measures to stimulate the economy, saying it
was “recovering moderately” and that efforts to stoke inflation were taking hold. However, it acknowledged that
headwinds from overseas could throw its predictions off course.