Nifty trapped in the narrow range of 5,200 and 5,400

The market closed in the red for the fifth week in a row as worries about the global economic growth and domestic concerns weighed on the sentiments. Across the world, lower manufacturing output in China and Eurozone raised worries about the pace of economic growth while rising fiscal deficit and the revenue loss on account of the roll-back in railway passenger fares were the main domestic concerns that led the market 1% lower in the week.

The Sensex settled 104 points lower at 17,362 and the Nifty closed the week at 5,278, a fall of 40 points in the week. The sentiment remains cautious with the market still under pressure. The Nifty is expected to remain trapped in the narrow range of 5,200 and 5,400.

The sectoral gainers were BSE Fast Moving Consumer Goods (up 3%) and BSE Healthcare (up 2%) while BSE Metal and BSE Power (down 3% each) were the losers in the week.

The Sensex leaders were Sun Pharma (up 6%), Hindustan Unilever, Hero MotoCorp, ITC and Bharti Airtel (up 3% each). The key losers were Jindal Steel & Power (down 7%), Hindalco Industries, Tata Power (down 6% each), Tata Motors and Maruti Suzuki (down 5% each).

The top gainers on the Nifty were Sun Pharma (up 6%), HUL, Hero MotoCorp, ITC and Ambuja Cements (up 3% each). The major losers on the index were Jindal Steel & Power, Hindalco Ind, Reliance Power, IDFC (down 7%) and Reliance Infrastructure (down 6%).

Investors’ disappointment with the Union Budget as it lacked firm reforms to push growth led the market lower on Monday, but bargain hunting after three straight days of decline saw the indices close in the positive on Tuesday. Across-the-board buying and gains in the European markets enabled the domestic market extend its gains on Wednesday.

However, the huge sell-off in the latter part of the session and the rupee hitting fresh two-month lows resulted in the market settling sharply lower on Thursday. Gains in the second half of trade, despite unsupportive global cues, helped the market close nearly 1% higher on Friday.

In a reply to the Rajya Sabha, finance minister Pranab Mukherjee said that due to the shortfall from disinvestment, lower tax receipts and high subsidy bill, the fiscal deficit in the current year is estimated to go up to 5.9% of the gross domestic product (GDP) against the original estimate of 4.6%.

The controversial hike in rail passenger fares was rolled back for all classes, except AC 2 Tier and First Class, by the new railway minister Mukul Roy, overturning the decision of his predecessor Dinesh Trivedi, who lost his job on account of his bold proposals. Mr Trivedi had assumed an income of Rs4,000 crore on account of the hike but the reversal of the decision could result in a loss of Rs3,000 crore, officials said.

On the global front, China's flash HSBC purchasing managers index (PMI) for March dropped to 48.1 from 49.6 in February—the fifth consecutive month China's factory activity has contracted. The data raises concerns about export as well as internal demand. Similarly, the Eurozone composite PMI for March fell to 48.7 from 49.3 in February. Most concerning is a sharp drop in factory activity in region's two largest economies—Germany and France.