Weekly Wrap: Govt reforms fail to perk up market mood

Moneycontrol Bureau

A lifetime low on the rupee, the spillover effect of the eurozone crisis and poor internal fundamentals ensured that the week was packed with volatility. Bad news for the market continued, causing Indian equities to tank around 4% despite several short covering rallies before the expiry of the November series.

Despite crossing the crucial 4700 level, the Nifty managed to recoup losses to close just above that, down 196 points. The Sensex fell below 16,000 and stayed there to close at 15,695.43, down more than 750 points. All in all, a disastrous week for equities.

Market Movers:

Dashing all talks of a policy paralysis, the Cabinet cleared the bill to increase foreign direct investment to 51% in multi-brand retail and 100% in single brand yesterday, bringing joy to the Indian retail sector. Even though the Bill was cleared with certain riders, industry experts and analysts believe this move will help generate employment in the country, increase manufacturing and help farmers.

Another move that was passed by the Cabinet was the Companies Bill 2011, which aims to introduce mandatory corporate social responsibility (CSR), class action suits and a fixed term for independent directors, among other things. Corporate Affairs Minister, Veerappa Moily, today said he hoped the Bill would get passed this Parliament session.

On the flip side, the depreciating rupee has had a very adverse effect on the economy. After touching its lifetime high of 52.73 per dollar on Tuesday, central bank intervention at 52.55 per dollar levels has helped appreciate the dollar a little. However, the Indian currency is still the worst performing Asian currency, having depreciated over 17% since July 2011.

Some good news came in for Air India late yesterday as the RBI gave a nod to restructuring the beleaguered airline