NIFTY closed at 4846 (52-wk low), losing 4.5% wow, amid global recessionary concerns Goldman Sachs,

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NIFTY closed at 4846 (52-wk low), losing 4.5% wow, amid global recessionary concerns
 All sectors ended in the red this week again with Public Sector Banks & Banks stocks losing 7.9% and 7.6% respectively wow
 Foreign outflows were around US$ 204mn; DIIs were net buyers of US$173mn wtd (as of August 17, 2011)
 Crude Oil (6%) led Energy (3.4%) to gain the most wow. Natural Gas lost 1.4% wow (as of August 18, 2011)
 Our India Economics team believes headline inflation will slow to 6% yoy by March 2012
Overview
The NIFTY breached 5000 to close at a 52 week
low of 4846 (-4.5% wow).The decline spanned
across all sectors, with Public Sector Banks losing
almost 8%. India’s July WPI Inflation came in at
9.2% yoy, a tad below our expectation of 9.3%.
Our India Economics team expects inflation to
slow to 6% yoy by March 2012 and maintains its
stance of a pause in interest rate hikes by the RBI
in FY12 and 100 bps of rate cuts in FY13.
NIFTY price performance
NIFTY fell 4.5% wow & has lost 21% ytd
Source: NSE, DataStream, GS Global ECS Research.
Foreign and domestic flows
The divergence between FIIs and DIIs continued as
foreign investors sold US$ 204mn wtd while DIIs
bought US$173 mn wtd (as of Aug 17, 2011).
Earnings sentiment
MSCI India Industrials had the weakest EPS
sentiment (-11.6%) wow. MSCI India is now
trading at 12.3X forward earnings, which
represents a 20% premium relative to MXAPJ.
Commodities
Commodities gained 2.8%, led by Crude Oil (6%)
and Copper (4.1%); Natural Gas ended in the red
(-1.4%) wow (as of August 18, 2011).
Earnings Results
Moser Baer, Mphasis, UBL Holdings (Aug 24);
Pantaloon Retail and Gillette Ltd (Aug 26).