Low rain forecast washes out some gains; Sensex off new peak

The benchmark S&P BSE Sensex fell from historic high due to tail-end selling from operators following forecast of below normal monsoon this year but still ended the shortened week up 59 points at 22,688.

The BSE and NSE were closed on April 24 on account of voting in the third and last phase of Lok Sabha elections in Maharashtra, including Mumbai.

The Sensex opened higher at 22,644.75 and shot up further to a life-time high of 22,939.31 on short-covering mainly in capital goods, banking, metal, PSU and healthcare sectors in view of expiry of derivatives contract on April 23 coupled with persistent foreign capital inflows.

However, the 30-share index declined to 22,636.75 on tail-end selling in FMCG, power, realty, IT and refinery sectors before ending at 22,688.07, still showing a gain of 59.23 points, or 0.26 per cent, over its last weekend level.

The NSE 50-share Nifty moved up marginally by 3.35 points, or 0.05 per cent, to 6,782.75 after hitting an all-time high of 6,869.85.

"The major reason (for weak sentiment) seems to be concerns over the news that monsoon is likely to be below normal which will impact the country's economy," said Rakesh Goyal, Senior Vice-President, Bonanza Portfolio.

The Met Department on Thursday said the monsoon is expected to be below normal in 2014 because of the El Nino effect, arising from the warmer-than-average sea surface temperature in the central and eastern tropical Pacific Ocean.

Monsoon is crucial for agriculture, particularly the kharif crops, because almost 60 per cent of the farmland in India is rain-fed.

Brokers said persistent capital inflows, too, kept the market tempo stable. Foreign institutional investors (FIIs) continued their buying spree as they invested a net Rs 1,645.01 crores during the week, as per SEBI's data, including the provisional figure of April 25.

Sentiments were positive in early stage in response to a statement from rating agency CRISIL that stable government post-elections will help economy grow at an average of 6.5 per cent for the next five years.

Encouraging earnings by some key corporates also helped indices to continue their record-breaking performance.

Next batch of Q4 results, Macroeconomic data, trend in investment by FIIs, global cues and movement of rupee against the dollar will dictate trend on the bourses during next trading week. The stock markets will remain closed on Thursday, 1 May 2014, on account of May Day.

On global front, the Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on Tuesday, 29 April 2014, and Wednesday, 30 April 2014.

16 scrips out of the Sensex pack ended higher while 14 others finished lower.

Major gainers were M&M (7.31 pct), Larsen (6.30 pct), BHEL (5.36 pct), Bharti Airtel (4.91 pct), Axis bank (4.77 pct), Coal India (3.43 pct), SBI (3.24 pct), Dr Reddy's Lab (2.74 pct), Tata Steel (1.78 pct), Hindalco (1.52 pct), Gail India (1.38 pct), HDFC (1.29 pct) and HDFC Bank (1.07 pct).

However, Wipro dropped by 11.24 pct followed by HUL 4.73 pct, NTPC 3.45 pct, ITC 2.72 pct, Cipla 1.59 pct, RIL 1.18 pct and Tata Motors 1.13 pct.

Among the S&P BSE sectoral indices, CG rose by 4.27 pct, Bankex 1.95 pct, Metal 1.61 pct, PSU 1.42 and HC 1.10 pct while FMCG dropped by 2.46 pct, Power 1.48 pct, Realty 1.38 pct, IT 1.35 pct and Oil&Gas 1.11 pct.

The total market turnover at the BSE and NSE rose to Rs 10,797.16 crore and Rs 59,392.71 crore respectively from the last weekend's level of Rs 8,498.88 crore and Rs 42,869.67 crore.

Forex: The rupee remained under pressure for the fourth consecutive week and closed down by 31 paise at 60.60 against the greenback during the truncated week under review following sustained dollar demand from importers.

However, better local equities, continued capital inflows and weak dollar overseas restricted the rupee fall, a forex dealer said.

At the Interbank Foreign Exchange (Forex) market, the local unit commenced almost stable at 60.30 a dollar, which was also the week's high, from last weekend's close of 60.29 and gradually declined further to a low of 61.19 on heavy dollar demand from importers, mainly oil refiners, to meet their month-end requirements.

Later, it recovered at the fag-end to settle at 60.60, still showing a fall of 31 paise or 0.51 per cent. In straight four week, it has plunged by 69 paise or 1.15 per cent.

The benchmark S&P BSE Sensex closed the week higher by 59.23 points, or 0.26 per cent, while FIIs infused Rs 1,645.01 crore during the week, including provisional data of April 25.

PramitBrahmbhatt, Veracity Group CEO, said, "Rupee depreciated by over half percent mainly because of the dollar demand from the oil importers which helped dollar to trade strong against Rupee, but in comparison to other major currencies Dollar traded weak and is heading towards to post a weekly loss as tension in Ukraine forced investors to overlook the strong economic data. Local equities posted record all time high and closed on a positive."

"Rupee is expected to trade weak due to uncertainty over Parliament elections outcome. Many analysts thinks that if Narendra Modi gets elected, the positive sentiments among the investors and business houses, will boost the local markets to trade positively and will help to reach new highs in coming days. The trading range for the Spot USD/INR pair is expected to be within 60.00 to 61.20," he added.

Forward dollar premiums remained weak due to sustained receipts by exporters.

The benchmark six-month forward dollar premium payable in September declined further to 210.5-212.5 paise from last weekend's close of 220-221.5 paise and far-forward contracts maturing in March 2015 also dropped to 449-451 paise from 460-462 paise.

The RBI fixed the reference rate for the USD at 61.1163 and for the euro at 84.5220 from 60.3805 and 83.5737, respectively.

The rupee dipped further against the pound sterling to end at 101.88 from last weekend's close of 101.37 and also slipped against euro to finish at 83.85 from 83.56.

However, it fell back against the Japanese currency to close at 59.38 per 100 yen from preceding weekend's close of 59.04.