Indian Equity Market update for week ended January 23, 2009

• Benchmark Indian equity indices ended more than 5% lower in the week ended January 16, led by flight of foreign funds and weak global sentiments
• Foreign institutional investors sold equities worth Rs 2309 cr (US$ 46 bn at current exchange rates) during the week till January 22; meanwhile mutual funds were marginal net sellers of equities worth Rs 116 cr (US$ 3 bn) during the week
• The benchmark BSE Sensex ended 6.96% lower for the week, while the broader S&P CNX Nifty ended 5.3% down.
• Weak Quarter 4 (October-December) results from some companies also led to selling in those stocks.
• All BSE sector indices analysed ended down, with BSE FMCG and Power being the least affected, while BSE Realty and BSE Metal being the worst affected.
• FMCG Index was the least affected down 2.2% for the week, as the sector is seen as a defensive bet in terms of turmoil.
• The second least decliner among sectoral indices was the power index, as sentiment improved after the Central Electricity Regulatory Commission hiked return on equity for power projects to 15.5% from 14% earlier.
• These new norms are especially going to benefit state-owned power companies such as Power Grid Corp which ended up 14% and was top Nifty gainer.Among other gainers, oil and gas shares such as Reliance and ONGC fared better during the week after the government has approved a three-year drilling holiday for deepwater exploration blocks.
• Among laggards, real estate shares were the worst hit on weak results forecast amid uncertain outlook; leading stock in the sector DLF slid more than 17,5% for the week.
• Metal shares fell on weak global cues; Steel Secretary’s statement that consumption of the commodity fell 13.5% YoY in Quarter, reversing a 10-12% growth trend in the past four years hit sentiment for steel companies.