Markets end volatile week on positive note - Eastern Financiers

Markets ended a volatile week of trade on a positive note amidst a mixed set of economic data and cautious global environment. The event packed week saw important macro datas in the form of manufacturing & services PMI, Current account data, etc. being announced. Sectoral data in the form of monthly auto sales also got announced during the week. Apart from these, the partial shut-down of the US government also caped the up-side of the markets. Nifty ended at 5907.30 up 74.10 points or 1.27 percent and Sensex shut shop at 19915.95, up 188.68 points or 0.96 percent. Sectoral indices were mixed in nature with the gainers out-numbering the losers. The domestic currency held strong vis-à-vis other international currencies and recovered marginally on a Weekly basis.

Important Macro data in the form of the HSBC manufacturing & services PMI that came in during the week had little to cheer for the investors. Factory activity shrank for a second month in September, albeit not as sharply as in August, on a dearth of new orders, The HSBC Manufacturing PMI, compiled by Markit, rose to 49.6 in September from 48.5 in August, but remaining below the watershed 50 mark that separates growth from contraction. Also, activity at Indian services companies shrank at the fastest pace in more than four years in September. The HSBC Services Purchasing Managers' Index (PMI), compiled by Markit, slipped from 47.6 in August to 44.6 in September, its weakest since April 2009. The PMI's new business index fell to 45 in September from 46.6 in August, the weakest reading since February 2009 and the third month running that demand has declined.

Another macro data that was instrumental in shaping market trajectory this week was the current account data for the June quarter. India's current account deficit was narrower than expected at $21.8 billion, or 4.9 per cent of gross domestic product, in the June quarter. Still, it was wider than the $18.17 billion, or 3.6 per cent of GDP, in the three months ending in March, on a seasonal slowdown in exports and firm imports. India's balance of payments slipped marginally into deficit for the June quarter at $346 million versus a surplus of $2.68 billion in March quarter.

Meanwhile, on the back of a slew of Fitch Ratings has warned India that any slippage on the policy front would have negative implications for its ratings, currently at lowest investment grade. It also cautioned India that there is much capital still left which could flow out of the country. It also said there was plenty of portfolio capital left to flow out of India if there is a further erosion of investor confidence.

Sectoral data in the form of Auto sales also painted a continued sorry state of demand for the sector. High interest rates and the ongoing slowdown in the Indian economy continued to take its toll on sale of automobiles as most car makers reported decline in their monthly sales.

Source : Equity Bulls

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