The Indian markets witnessed trepidation during the week after surging to their record high, though the internal macro
economic data along with foreign fund inflow were encouraging but the weak global cues kept dominating the local markets
and finally took them lower for the week. The start was on a positive note with benchmark indices surging to their fresh all
time highs and the rate sensitive’s' were encouraged with Finance Minister stating that while government holds the right to
set country's inflation target, the role of RBI remains to be implementation of that decision. However, things started turning
weak from the very next day and the markets came into consolidation mood despite slew of good economic data, first the
trade deficit in February narrowed to $8.13 billion from $14.12 billion in the year ago period then the index of industrial
production (IIP) in January stood at positive 0.1 percent, highest since September 2013, against an expectation of
continued contraction. Meanwhile, the consumer price index (CPI) for February slowed to 8.10 percent from 8.79 percent in
January, its lowest level since January 2012. Markets were mainly being guided by the movement in the global indices as
the Chinese industrial output, which measures production at factories, workshops and mines, posted the slowest rate since
April 2009, raising concern that Chinese Economy may be faltering. Though, despite the weak global environment markets
remained in range for the week and showed a smart trend reversal on the last trading day backed by WPI inflation numbers
easing to over nine months low, coming at 4.68% for the month of February. But the early profit booking forced the
markets to snap the first week in four, down by about half a percent. Broadly, Nifty lost 22.45 points to 6,504.20, Bank
Nifty up by 171.10 points to 12,055.85, BSE Sensex declined by 110 points to 21,809.80 during the week ended, BSE Midcap
index was down by 37.26 points, while Small-cap index up by 15.23 points. On the sectoral front, Capital Goods up by
388.86 points, Realty up by 28.11 points, Oil & Gas up by 136.58 points, Bankex up by 188.92 points and FMCG up by
85.12 points were the top gainers on the BSE sectoral space, while IT down 579.95 points, Teck down 269.91 points, Metal
down 450.43 points, Healthcare down 173.74 points and Consumer Durables down 67.17 points were the top losers on the
BSE sectoral front. Stock wise, BPCL up by 6.41% was the top gainer on Nifty for the week and Kotak Mahindra Bank up by
6.24% was another top gainer on the Nifty while Infosys down by 9.25% was the top loser and Sesa Sterlite down by
7.94% was another major loser on the Nifty. During the week, Nifty touched the highest level of 6562.85 on March 11,
2014 and the lowest point of 6432.70 on March 14, 2014 and finally closed at 6504.20 with a weekly loss of 22.45 points.
For the coming week, 6436.98 followed by 6369.77 are likely to be good support levels for the Nifty, while the index may
face resistance at 6567.13 and 6630.07 levels.
INDUSRY & ECONOMY NEWS
India's trade deficit recorded its steepest fall since September 2013 in the month of February to $8.13 billion from $14.12
billion in the year ago period and $9.92 in January, led by sharp decline in imports, especially oil and non-oil imports.
Signaling that government's efforts at containing deficit had started reaping benefits, country's import slid by a steep 17%
on Year-on-Year (Y-o-Y) basis. While oil imports were down to $13.7 billion from $14.13 billion in February 2013, non-oil
imports too showed a decline of 24.5% to $20.12 billion from $26.65 billion (Y-o-Y) basis. However, in a jolt to the
economy, exports declined once again after a span of seven months. Exports came down by 3.67% at $25.68 billion in
February compared to $26.66 billion in the same month last year.
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WORLD MARKET BEHAVIOUR DURING THE WEEK
US MARKET:
The US markets remained under pressure during the passing week as investors were concerned over the global tension and
weak data from China, which reignited worries about economic slowdown. Investors kept an eye on a vote in Crimea this
weekend when citizens will decide whether to stay with Ukraine or join Russia. Secretary of State John Kerry warned that
US and Europe could take 'very serious' steps should there be no sign of resolution between Ukraine and Russia as the
Crimea region prepares to vote on a separatist resolution. Meanwhile, Federal Reserve Bank of Philadelphia President
Charles Plosser stated that the Federal Reserve may have to accelerate the pace of tapering to take into account the
economic pickup currently ongoing in the US and the improving forecast for the near future. Plosser added that reducing
the pace of asset purchases in measured steps is moving in the right direction, but the pace may leave us well behind the
curve if the economy continues to play out according to the FOMC forecasts.
The US budget deficit narrowed in February after rising employment boosted individual taxes and the Federal Reserve
delivered higher earnings on its portfolio. Spending exceeded revenue by $193.5 billion last month, compared with a $203.5
billion deficit in February 2013. The deficit totaled $377.4 billion in the first five months of fiscal 2014, compared with a
$494 billion shortfall from October 2012 through February 2013. The US Treasury Department has began taking steps to
keep funding the government without breaching the nation's debt limit, as House Republicans continue trying to find the
votes to raise it. Republicans haven't been able to find sufficient votes for at least four plans floated in the last week as
conditions for raising the debt limit.
There were some disappointing reports on the economic front. US wholesale inventories rose 0.6% in January, while
wholesale sales fell by 1.9%. At January's sales pace, the inventory-to-sales ratio rose to 1.20 months from 1.18 in
December. Small-business sentiment slumped in February, on concerns over sales, the economy and employment driving
the downturn. The National Federation of Independent Business stated that its small-business index dropped 2.7 points to
91.4. Besides, US import prices spiked in February, as cold weather caused a surge in demand for imported fuels that heat
homes and businesses. The price of imported goods and services overall climbed 0.9 % in February compared a month
earlier. On the other hand, the number of people who applied for US unemployment benefits in the first week of March fell
to the lowest level in more than three months, perhaps a sign of an uptick in labor-market conditions. Initial jobless claims
fell by 9,000 to 315,000 in the period of March 2 to March 8.
EUROPEAN MARKET:
The European markets continued trading under pressure during the passing week on concerns over Ukraine crisis. In the
region the European Central Bank President Mario Draghi stated that ECB has been preparing additional policy steps to
guard against deflation taking hold in the euro zone as the strong euro weighs on prices. Draghi added that forward
guidance may help to weaken the euro and lower real interest rates, easing the risk that inflation won't return to the goal
set by policy makers. The ECB's forward guidance states that policy makers will keep official interest rates at present or
lower levels for an extended period of time. Draghi highlighted that too-low inflation is currently more relevant than toohigh
inflation, though the risk of deflation is quite limited. German Finance Minister Wolfgang Schaeuble unveiled plans to
achieve a consistently balanced budget from 2015.
Portugal's secretary of state for European affairs, Bruno Ma''es, stated that Germany needs to implement many of the
structural reforms that Portugal has itself carried out in recent years, to boost competitiveness in service sectors. Italian
Prime Minister Matteo Renzi announced a $14 billion package of tax cuts and other measures intended to stimulate Italy's
stagnant economy, invest in public education and create jobs at a time of record unemployment, especially for young
people. According to revised gross domestic product data, Greece's economy has shrunk by almost 24% over the past six
years in the deepest and most protracted peacetime recession in its history. Greek GDP shrank 3.9% in 2013, from an
estimate of 3.7% in February.
Euro Zone's industrial production declined by a seasonally adjusted 0.2% in the month of January, disappointing
expectation for a gain of 0.5%, Industrial production in December was revised to a 0.4% drop, from a previously reported
fall of 0.7%. Year-on-year, industrial production increased at an annualized rate of 2.1% in January from a year earlier,
above expectations for a 1.9% gain and after rising at a rate of 1.2% in the preceding month. Euro Zone's index of investor
confidence improved to 13.9 this month from a reading of 13.3 in February. Business activity in the 17-nation euro zone
ticked up in December, but the recovery is uneven and weak French data of particular concern. Euro zone's Composite
Purchasing Managers Index (PMI) for December rose to 52.1 from 51.7 in November. Separately, Euro zone recorded a
trade surplus of 17.2 billion euros ($24 billion) in October, up sharply from 10.9 billion euros in September. The 28-nation
bloc meanwhile posted a surplus of 4.3 billion euros in October, reversing a deficit a year ago of 10.2 billion euros.
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ASIAN MARKET:
All the Asian equity indices ended the weekly trade in the red terrain during passing week, as investors remained away from
riskier assets due to economic uncertainty in China and the United States, combined with political tensions in Ukraine. The
global concerns resurfaced as latest reports indicate that Russia's Defense Ministry announced new military operations in
several regions near the Ukrainian border, even as Chancellor Angela Merkel of Germany warned the Kremlin to abandon
the politics of the 19th and 20th centuries or face diplomatic and economic retaliation from a united Europe.
On the regional turf, Japanese Nikkei remained the top loser, down by over six percent on account of yen appreciation.
Sentiments also remained dampened after the country's industrial production rose less than expected to a seasonally
adjusted 3.8% from 4.0% in the preceding month. In Hong Kong, Hang Seng tumbled by around five percent, amidst
ongoing concerns about the risk to global financial market stability from credit tightening in China and political tensions in
the Crimean peninsula.
Moreover, Chinese Shanghai composite tumbled over two and a half percent during the week after weaker-than-expected
Chinese output and retail sales data disappointed the market. China's industrial output rose 8.6 percent in the first two
months of 2014 as compared to a 9.7 percent expansion in December, missing market expectations, while growth in retail
sales narrowed to 11.8 percent from 13.1 percent in December. Meanwhile, Chinese Fixed Asset Investment fell to a
seasonally adjusted 17.9 percent from 19.6% in the preceding month.
