Sensex fails to sparkle at the start of New Year...down 3%

The run ahead of fundamentals came to a halt with key indices closing lower
this week. Besides the expected profit taking after a seven-month rally, the
RIL-RNRL court battle added to the weakness. Quarterly numbers from India
Inc. also failed to cheer sentiment on Dalal Street. Finally, the BSE benchmark
Sensex closed the week down by 3% and NSENifty closed lower by
2.8%.The BSE Sensex hit an intra-weekhigh of 17,457 and low of 16,721
while, the NSE Nifty hit an intra-week high of5,182 and low of 4,968.
The Foreign Institutional Investors (FIIs) purchased Rs51.2bnduring the week. On the other hand, the Domestic Institutions were net sellers to the tune of Rs15.7bn during the week.
The top gainers: The top gainers in the Sensex were TCS (up 10%), Tata Power (up 6.7%), DLF (up 4.9%),Hindalco (up 4.8%) and Wipro (up 2.4%).
The Top Losers: The top losers in the Sensex were Grasim (down 10.3%), Tata Steel (down 7.8%), TataMotors (down 7.7%), L&T (down 7.2%) and Reliance Capital (down 6.9%).
The BSE IT Index (up3.6%): The top gainer in the IT sector was TCS. The stock shot up over 10%during the week. According to report released by IIFL during the week, “TCS beat expectation with ~4% QoQ US$ revenue growth in 2QFY10—a number we believe will be the best in this quarter among the top-3 vendors. Volumes grew~5% QoQ and EBITDA margin expanded by ~150bps, despite a hike in variable salary payout (payout of 150%). The company’s products business is recovering strongly after a bad year—revenues are up 60% since 4QFY09.
Stronger signs of growth are also evident in its key vertical, BFSI (45% of revenues), as technology integration deals ramp up. The appreciating rupee is a risk and pressures in the telecom, manufacturing and high-tech domains make a stronger recovery unlikely. However, given stronger volume growth and margin expansion, we expect FY10 and FY11 EPS estimates by 8% .HCL Tech rose over 8% during the week. The company tied up with Microsoft to provide retail banking solutionto helps banks in the Asia-Pacific. Wipro was up 2.4% during the week.
The company entered into a 10-year IT outsourcing agreement with Delhi International Airport Ltd for providing IT infrastructure and services for IGI Airport .Mphasis (up 6%) and PatniComputer (up 4.6%) were among the other notable gainers.
The top losers were Financial Tech (down 5.7%), Mahindra Satyam (down 5.3%), Oracle Financial (down 4.1%) and Sasken Communication (down 0.7%)