The equity markets took a breather ahead of the large public issues lined up for the next two weeks. The BSE Sensex lost 161 points (down 2.7 per cent) over the week. The S&P CNX Nifty lost more – down 3.2 per cent. The trading volume remained high at Rs 8,686 crore – up nearly 7 per cent from last week.
The mid-caps continue to outperform the large-caps. While last week, mid-caps gained more than the large-caps, this week they lost less than the large-cap counterpart. The S&P CNX Mid-cap Index just closed 1.8 per cent lower and the broader S&P CNX 500 Index was down 2.5 per cent.
FIIs, however, continued their buying spree and made net-investments of Rs 1,120 crore in the Indian markets. Domestic fund houses, on the other hand, remained net sellers for the second consecutive week. They offloaded equities worth Rs 289 crore till Thursday.
The market opened on a positive note on the first two trading sessions. But, the real jolt came a day before the opening of the public issue of IPCL. The Sensex crashed 172 points on Thursday – the biggest singe day fall in the 35-months. Most market players pulled out money due to the IPO-related liquidity worries. This sluggishness continued on the last trading day too, as the Sensex closed down 4.38 points on Friday.
The public issue of IPCL for Rs 5.94 crore, which opened on Friday, got a huge response in the market. The issue was oversubscribed 10 per cent in the first day of bidding. The government is offloading its 24 per cent stake in IPCL to the public. For the first time, the shares will be issued at a discount of 5 per cent over the floor price of Rs 170 to the retail investors. Over the week, the share price of IPCL in the secondary market gained 6.9 per cent – the highest among the Sensex stocks.
Among the sectoral indices, except for the BSE Healthcare Index (up 0.7 per cent), all indices ended the week in red. The BSE IT Index lost the most – down 5.3 per cent. Satyam Computes shed 7.8 per cent, Wipro was down 6.9 per cent and Infosys lost 5.4 per cent.
This was closely followed by BSE FMCG Index, which closed down 5.2 per cent. This was mainly because of the 11.6 per cent fall in the index heavyweight, HLL. It was, in fact, the worst losers among the Sensex Stocks.
On Friday, SEBI clarified that FIIs can issue participatory notes to entities that are regulated by either of the following:
1. The central bank like Bank of England, the Federal Reserve, the Hong Kong monetary Authority, etc.
2. The securities or futures commissions like Financial Services Authority (UK), the Securities and Exchange Commission (USA), etc.
3. The stock exchange like New York stock Exchange, London Stock exchange, etc.
The forthcoming public issues:
1. IBP – February 23
2. CMC – February 23
3. Bank of Maharashtra – February 25
4. Dredging Corp. – February 26
5. GAIL – February 27
6. Petronet LNG – March 1
7. Power Trading Corp. – March 1
8. ONGC – March 3
Outlook
Most market players are cautious and are playing a waiting game ahead of the big public issues. However, the FII inflows have been good in the recent period, which is expected to provide momentum to the Indian stock markets.
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