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For the third week in a row, both the Indian bellwether indices — Nifty and Sensex — closed in the red, losing about 1.5 per cent each, notwithstanding Friday's recovery. Unearthing of the S-band spectrum scam followed by CBI arrests in the telecom probe further pressured the markets during the week.
The week also saw a hike in the expected growth rates — from 8 to 8.6 per cent — of the Indian economy in the advance estimates released by the government. Car sales in January rose 26 per cent to a record, adding to evidence of a strong consumer demand. However, the Industrial output growth slowed to a 20-month low of 1.6 per cent in December versus 2.7 per cent in November.
The BSE Metals Index shed over 5.6 per cent over fears regarding poor pricing power and substantial erosion of margins, as most companies have not been able to pass their costs. That Arcelor Mittal posted bad results did not help the sentiments either. The stocks of Hindalco and Jindal Saw lost over 10 per cent each, while Sesa Goa, National Aluminium and Tata Steel shed about 6-7 per cent each.
Real-estate stocks continued to remain under pressure on the back of sequential decline in volume and fears over rising interest rates. The BSE Realty Index shed 4.6 per cent. The biggest loser was Parsvnath Developers , which lost over 38 per cent during the week following concerns over promoters' pledged shares. Among other losers were Unitech, Sunteck Realty and Orbit Corporation that lost between 15 per cent and 19 per cent each.
Telecom stocks such as Bharti Airtel and Idea Cellular fell by about 4 per cent and 9 per cent respectively on TRAI's recommendations on 2G spectrum pricing. RCom fell by about 15 per cent as analysts predicted a sixth straight drop in its profits.
The stock of Gitanjali Gems ended the week 15 per cent higher following unconfirmed reports that France's Luxury conglomerate, LVMH, was planning to buy minority stake in Gitanjali Gems.
The stock of Allied Digital plunged 39 per cent during the week due to negative sentiments following survey operations by IT authorities on its premises. The management later clarified that the survey ended on a satisfactory note and said that its board will meet next week to consider a buy back.
The stock of Moser Baer fell by about 19 per cent following disappointing results. The company reported a net loss of Rs 115.69 crore in Q3 December 2010.
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