Bulls find a Magic Lamp
A whole new world
A new fantastic point of view
No one to tell us no
Or where to go
Or say we're only dreaming
This Aladdin theme song seems to calmly suit if not soothe the bears who courageously fought back after a disastrous start this week. The bulls seem to have found the Magic Lamp from somewhere. How else would you describe the sudden spurt after a subdued start? That too with Infosys failing to positively surprise. Bulls appear to be floating smoothly above the magical 14k mark and surely dreaming of greener pastures for months to come. The gains were led by heavyweights like Wipro, Reliance Industries, ICICI Bank and TCS. After an overwhelming victory on a Fantastic Friday, the bulls have seem to have entered into a whole new world, where it seems like no one could stop them from marching ahead. (We know FII liquidity and profit booking could spoil the party anytime). The key indices rose to a record high, posting its third weekly gain with benchmark Sensex adding 196 points or 1.41% to close at 14057 and NSE Nifty adding 1.73% or 69 points to end the week at 4052. The markets managed to recover well from a shaky start to the week as nervousness ahead of the Infy results kept the traders on the sidelines. Despite Infosys ‘failing to positively surprise’ in its quarterly numbers the bulls rebounded after a three-day losing sequence. Lower crude oil prices and firm global markets also contributed towards the meteoric rise over last tow trading sessions.
The markets had a dream run in last two trading sessions, as stocks rose the most in almost six months on Friday, overcoming concerns of a possible price cut by Industry Finance Minister Chidambaram asked industry not to take advantage of growing demand to increase prices. Finance Minister asked India's industry to cut prices in a bid to reduce the inflation rate. Oil prices continued to slide, as they have since the start of the year, due to warm US weather and easing supply fears. US light crude oil for February delivery fell $2.14 to settle at $51.88 a barrel on the New York Mercantile Exchange, pushing the auto and Aviation stocks higher. Sugar, Cement, Bank, FMCG, Oil & Gas and Small cap stocks were among the other major gainers this week.
Tech stocks were a buzz over the week following Q3 numbers by Infosys. Infosys recorded a sequential revenue and net profit growth, which was in line with market expectations at 5.9% and 5.8% respectively. TCS and Wipro were among the other major gainers across the sector ahead of their results on Monday. TCS jumped nearly by 5% to Rs1325 and Wipro rose by 4.5% to Rs626. Among the Mid-Cap stocks HCL Tech advanced 2.8% to Rs633, Patni gained 2.6% to Rs412 and i-Flex was up by 2.4% to Rs2019.
Auto stocks were up during the week as crude continued to slide lower, the sentiments also got a lift after India announced that Government would review diesel and gasoline prices on 31 January, 2007. A possible cut in fuel prices should augur well for the auto stocks. M&M paced ahead by over 4% to Rs933, Tata Motors gained by 0.9% to Rs940 and Ashok Leyland rose 2.5% to Rs46.
Oil & Gas stocks rose over the week as crude oil fell sharply. BPCL rose over 4.5% to Rs368, HPCL advanced 2.2% to Rs304 and IOC added 1.4% to Rs482. Oil exploration majors also gained during the week. ONGC rose 3.2% to Rs924 and Reliance Industries was up by 4% to Rs1339.
FMCG stocks returned to action yet again ahead of the announcement of Q3 results. HLL led the rally by recording an advanced of over 3% to Rs219. The company has recently raised prices of its several products, which should do well in its earnings. ITC advanced 3.5 % to Rs171; Nestle surged over 6% to Rs1245, Marico spurred by over 4% to Rs565 and Dabur gained 1.1% to Rs153.
Banking stocks managed to reverse losses on Friday on optimism a rule change allowing the RBI to lower the limit of government bonds lenders must hold, will free up more cash to meet demand for loans from companies and individuals. Private Bank major ICICI Bank was among the major gainer and gained 6.5% to Rs970 and HDFC Bank was up by 0.9% to Rs1063. Among the Mid-Cap stocks UTI Bank spurted over 5.55 to Rs499 and PNB added 1% to Rs516.
Finally, Sugar stocks turned sweeter over the week as the ban on exports was lifted. Bajaj Hindusthan Ltd. and Dwarikesh Sugar were among the major gainers after the removal of a six-month ban on exports of the commodity-boosted chances of a recovery in domestic sweetener prices. Bajaj Hindusthan gained 2.3% to Rs209, Oudh Sugar rose nearly by 6% to Rs88, Sakhti Sugar was up by 1.4% to Rs99 and Dwarikesh Sugar added 3.2% to Rs90.
IFCI: IFCI was the star performer of the week. The scrip skyrocketed over 67% to Rs21 touching a high of Rs23.5 and low of Rs13.31 during the week. The stock was in the limelight after selling its 7% stake for Rs7.8bn in the NSE to a group of investors led by NYSE Group. Market buzz that the company has called for bids for its 750 acres land at Sultanpur, is likely to be just a rumor.
Tech Mahindra: The scrip rose 12% to Rs1845 after hitting a high of Rs1871 and a low of Rs1637 during the week. The Indian software venture of BT Group Plc set up a software development center in Hyderabad, to employ 3000 workers. We may continue to see further action in the counter as the company declares its earnings on 18th January.