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Post Market Update:Sensex falls 108 points this week




Major news for the week:
           April IIP at 6.3% versus 7.3%
           Food inflation at 9.01% versus 8.06%
           India?s May car sales slowest in 2 years
           DB Realty FY11 consolidated net profit up 19%
           Government approves 16 FDI proposals worth Rs924 crore

Indian indices

The week saw the Indian markets trading in a tight range and struggling for direction. The markets were locked in a narrow range and were waiting for some triggers to break out of the range. Lack of participation among investors also led to a tepid week. Federal Reserve Chairman Ben Bernanke acknowledged a slowdown in the economy, which spooked the sentiments across the world equities. A spike in food inflation to eight-week high and slower April industrial output growth led to a rate hike fears that the central bank would be raising key rates by 25 basis points in June policy.

The Sensex swung 363 points between a high of 18546 and a low of 18183 and closed the week at 18269, down by 108 points or 0.59%. The Nifty swung about 113 points between a high of 5570 and a low of 5457 and ended at 5486, down 31 points or 0.56%.

Maruti Suzuki was the flavour of the week as the company?s shares remained under pressure on reports that the strike by workers of the company's plant in Manesar in Haryana could spread across the auto belt of Haryana. Nearly 2,000 workers at Maruti's factory at Manesar in Haryana began a strike early this month demanding recognition of their union, Maruti Suzuki Employees Union. Media reports on Friday (June 10, 2011) said that the Haryana state government has ordered the workers to resume work at the unit.

Global indices

Most of the global indices closed the week on a negative note. The only three gainers this week ? Germany's DAX 100 rose by 0.71%, Japan?s Nikkei rose by 0.23% and London?s FTSE 100 up marginally by 0.02%. On the losers? side, Hong Kong's Hang Seng was the biggest loser of the week, falling by 2.31%, following that US Nasdaq down by 1.75% and China?s Shanghai Composite declined by 0.80%.

Outlook

Upcoming week will be full of events that will decide the trend of the markets. The first installment of advance tax numbers from Indian firms due on June 15, 2011, which could provide a cue on Q1 June 2011 corporate earnings.

Data on headline inflation for May 2011 is due on June 14, 2011. The Reserve Bank of India in its mid-quarter monetary policy review on June 16, 2011 is seen raising its key lending rates by 25 basis points. Progress of the monsoon rains, FIIs fund flows and changes across the globe may also impact market sentiments.