Indian mkts end week maintaining pace as FIIs keep the faith

MUMBAI, Apr 12 (Business Standard): Benchmark share indices ended higher in the week to April 11 as foreign institutional investors (FIIs) remained overweight on India and continued their buying spree. Further, a huge voter turnout raised prospects of a victory for the business-friendly Bharatiya Janata Party.
The 30-share Sensex ended up 269 points or 1.2 per cent at 22,629 and the 50-share Nifty ended up 82 points at 6,776.
FIIs have been aggressive buyers in Indian equities, having purchased stocks worth nearly Rs 70 billion in April so far. During the first three months of the current calendar year, FIIs were net buyers in Indian equities to the tune of Rs 221.96 billion, according to data available on the Securities and Exchange Board of India (Sebi) website.
Meanwhile, buying in the broader market helped both the mid-cap and small-cap indices to outperform the benchmark indices. The BSE Mid-cap index gained nearly 2 per cent and the BSE Small-cap index surged 3.6 per cent.
On Friday, both the BSE Mid- and Small-cap indices touched 15-month highs, after having run up as much nine and 13 per cent in the last one-month. The BSE Mid-cap Index closed at 7,338, up 0.09 per cent from its previous close.
Analysts said large-cap names had seen a sharp surge in the first part of the rally, which started in February this year. But since valuations in these stocks were starting to look a bit stretched, the focus had now shifted to mid-caps, they added.
Meanwhile, trade deficit hit a five-month high during March to $10.51 billion as merchandise exports declined and oil imports rose, data from the ministry of commerce and industry showed. However, a bigger problem lay in non-oil imports, which contracted about 12 per cent year-on-year, indicating continued slowdown in industrial activity.
Industrial production continued to slide in February, falling to a nine-month lows, much below market expectations. The index of industrial production (IIP) for February fell 1.9 per cent, against a rise of 0.8 per cent in the previous month.
The week was engulfed by Sun Pharma's acquisition of Ranbaxy Laboratories. The landmark all-share $4-billion transaction heralds the merger of two major Indian pharmaceutical companies to create the world's fifth-largest generic drug maker by sales. Under the terms of the agreed deal, Ranbaxy shareholders will get 0.8 Sun Pharma share for each Ranbaxy share held.
Sesa Sterlite ended over 3 per cent after the company released production data for the fourth quarter and financial year ended March 31, 2014. The mined metal production for the year was 880,000 tonnes, marginally higher than the previous year.
In the banking pack, State Bank of India ended up 4.5 per cent after the state-owned banking major tapped the overseas bond market with a dual tranche benchmark issue of 5-year and 10-year maturity to raise up to $1-billion.
Auto major Maruti Suzuki ended with marginal gains. The company is recalling 103,311 units of its models Ertiga, Swift and DZire made between November 12 and February 4 to replace faulty fuel filler neck.
Tata Motors ended up 4.5 per cent after Jaguar and Land Rover (JLR), its British-based arm, registered a 2.7 per cent year-on-year (yoy) growth in retail sales in March 2014. However, for FY2014, JLR registered a robust growth of 15.9 per cent yoy to 434,311 units riding on the back of strong momentum in recently launched models.
Markets are likely to remain volatile, with only three trading sessions next week. The voter turnout will be keenly watched as the next phase of elections unfold.
The government will release inflation numbers based on the consumer price index and wholesale price index on Tuesday.
IT sector will be focus as Infosys kicks off the fourth quarter earnings season on Tuesday, followed by TCS on Wednesday, and Wipro and HCL Technologies on Thursday. Index heavyweight Reliance Ind will release Q4 earnings on Friday.
Markets will remain closed for trading on 14 April on account of Baba Saheb Ambedkar Jayanti and on 18 April on account of Good Friday.