Corporate earnings biggest market movers this week

The start of the week saw the benchmark index, the Bombay Stock Exchange (BSE) Sensex, keeping up the momentum of the previous week. It rose 630 points from Monday to Thursday (July 24). However, heavy selling on Friday, especially in banking and metal stocks, pulled down the index by 182 points to 26,088.

This week, for the first time, the Nifty closed above 7,800 levels (on Thursday). However, this was short-lived. The index closed the week at 7,790, just short of the 7,800-mark.

Corporate earnings were the biggest market movers this week.

"Infosys and Wipro results disappointed while heavyweights TCS, HDFC Bank, Reliance and Axis Bank rallied as their first-quarter results were above expectations," says Rakesh Goyal, senior VP, Bonanza Portfolio.

The IT index was the best performer (up 4 per cent) due to a sharp depreciation of the rupee, hope of pick-up in IT spending in the US and Europe and better prospects than the cyclical sectors.

The FMCG index, too, did well and rose 2 per cent. The mid-cap index took a breather and fell 1 per cent while the healthcare index rose by 2 per cent. Bankex, auto, PSU and metal indices remained flat. Real estate and power stocks were volatile and closed in the red.

The top gainer, Financial Technologies, rose 30 per cent. The company has undertaken several asset sales in the recent past, including that of the MCX.

To facilitate disinvestment by erstwhile promoters of the MCX, the Securities and Exchange Board of India has relaxed the lock-in period for stake sale in the bourse. Earlier this month, the company sold 6 per cent in the MCX in two rounds for about Rs 220 crore. Thereafter, it reached an agreement with Kotak Mahindra Bank for selling another 15 per cent stake.

The other gainers were pharmaceutical majors Wockhardt and Glenmark Pharma, which rose 19 per cent and 14 per cent, respectively. Glenmark reported a strong set of numbers for the first quarter. In Group B, Tata Metalliks and Tata Sponge rose 81 per cent and 54 per cent, respectively. These two makers of pig and sponge iron reported good numbers for the quarter ended June 30.

Steel stocks rose on the back of Chinese manufacturing data, which rose to an 18-month high.

Among the losers in the A Group, Ipca Laboratories, fell 16 per cent owing to an inspection by US FDA, followed by Cairn India and Jaiprakash Associates (which fell 10 per cent). DLF, Dena Bank, Indiabulls Real Estate and GMR Infrastructure fell 9 per cent each.

Insurance-related stocks like Max India and Reliance Capital rose after the Cabinet approved the increase in the foreign direct investment limit in the insurance sector from 26 per cent to 49 per cent.

"Potential investments in insurance could be in the range of Rs 80,000- 100,000 crore. This may be just the push for putting India in the league of top markets," says Anuraag Sunder, insurance expert, PwC India.

Alex Mathews, head, Research Geojit BNP Paribas Financial Services, says stock markets may now find support from investments by foreign institutional investors or corporate earnings. In fact, FIIs made net purchases of Rs 8,900 crore in equity and debt markets this week.