Indian stocks have broken a four-week winning streak amid growing worries that policy paralysis will continue due to the heightened political tension over a controversial CAG report on coal block allocations. Even if the political temperature cools down a little, chances of any meaningful reforms are quite dim.  

Meanwhile, the odds of rate cuts in the near term have decreased following the better-than-expected Q1 FY13 GDP growth. The Centre doesn’t have the fiscal room to spur growth. In fact, there are fears the Government will overshoot FY13 fiscal deficit estimate.  

The RBI is hamstrung due to sticky inflation, widening twin deficits and lack of credible fiscal reforms. In a nutshell, the Indian markets are likely to remain in a limbo for some time to come before trending higher again.
 
While the strong global liquidity has lifted the main indices of late, the trend may not be sustainable in the face of strong and persistent macro-economic headwinds. Globally, markets will move to the beats of the Jackson Hole summit, ECB and FOMC policy meetings, a German constitutional court’s decision on ESM.

Also Read… Sensex down 1%…Snaps 4-week winning streak

For the week, the BSE Sensex and the NSE Nifty ended at 17380 and 5258 respectively losing 2.5% each.

Sensex top gainers: The top gainers in the Sensex were Cipla (up 2.7%), TCS (up 1.4%), HDFC (up 1.2%), Tata Power (up 1.2%) and ITC (up 0.9%).

Sensex losers: The top losers in the Sensex were Reliance Power (down 11.8%), Hero Motocorp (down 9.5%), Reliance Infra (down 9.2%), BHEL (down 7.9%) and Reliance Capital (down 7.3%).

The BSE IT Index (%): The top losers in the IT sector were Mahindra  Satyam (down 7%), Infosys  (down 3.4%), HCL Tech  (down 2.3%) and Wipro  (down 0.3%).

The top gainers were Mphasis (up 2.4%), Oracle Financial (up 2.2%), TCS (up 1.4%), Financial Tech (up 0.4%) and Sasken Communication (up 0.3%).

The BSE Healthcare Index (%): The top losers in the Pharma space were Zandu Pharma (down 5.2%), Piramal Healthcare (down 5%), Strides Arcolab (down 4.3%), Fresenius Kabi (down 4.3%) and Wockhardt  (down 4%).

The top gainers were IPCA Labs (up 8.2%), Glenmark Pharma (up 7.9%), Dishman Pharma (up 4.3%), Cadila Healthcare (up 3.7%) and Pfizer (up 3.5%).

The BSE Auto Index (%):The top losers in the auto space were Hero Motocorp (down 9.5%), Bajaj Auto  (down 5.6%), Ashok Leyland (down 5%), Tata Motors  (down 4.8%) and Maruti (down 4.4%).

The top gainers were Swaraj Mazda  (up 2.6%), M&M (up 0.7%) and Hindustan Motors (up 0.5%).

The BSE Oil & Gas Index (%):The top losers in the oil & gas space were Essar Oil  (down 10.8%), Great Offshore (down 8.1%), Hindustan Oil (down 7.9%), Gujarat NRE Coke (down 7.5%) and HPCL (down 6.7%).

MRPL gained 1.6% during the week.

The Telecom Sector: The top losers in the Telecom space were Gemini Comm  (down 33.8%), Tata Teleservice (down 11.6%), RCom (down 10.9%), Wire And Wireless (down 10%) and MTNL (down 8.6%).

The Realty Sector (%):The top losers in the Realty space were HDIL (down 11.3%), Unitech  (down 8.9%), DLF  (down 6%), Ansal Props (down 5.5%) and Anant Raj Indus (down 3.3%).

Sobha Developers rose ~1.8% during the week.

The Metals sector (%):The top losers in the metals sector were Lloyds Metals (down 11.3%), Tata Steel (down 7%), SAIL (down 6.4%), JSW Steel  (down 6%) and Tata Metaliks (down 4.8%).