The week was marred with high volatility. We had the Sensex and the Nifty touching newer all time high levels on three trading days of the week while the end of the week saw a correction of 113.19 points.
Bulls were in command on the bourses last week with the government forecasting a strong 9.2% GDP growth for the current fiscal, and on the back of FIIs stepping up purchases.
The Sensex closed on Friday, 9th February 2007, at 14,538.90, gaining 135.13 points (0.94%) over the previous week’s closing (Friday, 2 February 2007). The Nifty closed marginally in the green with a gain of 3.9 points (0.09%) over the previous week’s close.
The BSE Mid Cap index was down 53.41 points (0.87%), to end Friday at 6,064.79. Mid cap stocks took a lot of battering on the last trading day of the week, with the index losing 108.76 points (1.76%) on the day over its previous day’s closing.
The BSE Small Cap index now 7490.10, lost 0.93% or 70.62 points. The week started off with a flier on Monday (5 February’07) as both the Sensex and the Nifty closed at their all time high levels. The market was fuelled by telecom and auto stocks as IT stocks, which often play vehicle for the market to enter newer territories preferred to stay calm on the day. Metal stocks were among the significant losers on the day. The Sensex gained 112.13 points (0.78%), to settle at a lifetime closing high of 14,515.90. It also struck a lifetime high of 14,526.51, surpassing its earlier all-time high of 14,462.77 from Friday (2 February 2007). The Nifty gained 31.85 points (0.76%), to settle at a lifetime closing high of 4215.35. The Nifty hit an all-time high of 4,219 in intra day trading.
Tuesday (6th February’07) saw the Sensex confined to a narrow range of 112 points but volatility was quite high within this range. The Sensex was seen flirting with green and red during the day and finally closed losing 37.71 points to settle at 14515.90. Market men termed the correction as purely technical considering that the bourses had put on a lot of points in the past few trading days.
It was felt that the market would continue with the lackluster sentiment of Tuesday, trying to replenish itself with the strength it had spent for the upward climb in the past couple of sessions. But the market lashed back at this misconstrued complacency, as both the Sensex and the Nifty closing Wednesday (7th February’07) at newer all time high levels. The Sensex put on 164.94 points or 1.1% to settle at 14643.13. The Nifty closed the day 28.35 or 0.68% points above its previous day closing to settle at 4224.25. The government estimated GDP growth of 9.2% in the financial year ending March 2007, above RBI’s forecast between 8.5 - 9%, thus contributing to the bullish sentiment on the day.
Thursday (8th February’07) the Sensex closed flat or marginally up by 8.96 points to settle at a new all time high level of 14652.09. The closing however is not a true indicator of the day’s trading activity. The market stayed in the red for better part of the day drawing negativity from weak Asian indices. The Nifty lost a negligible 0.85 points, to close at 4,223.40.
On Friday (9th February’07), the bearish sentiment was evident and the market did not look confident at any point of time during trading. Mid cap stocks lost severely. Some termed it as a purely technical correction while many attributed the fall to the two-year high inflation figure that came out on the day. High crude oil prices had their share of negativity on the market as well. Sensex lost 113.19 points (0.77%), to settle at 14,538.90 while the Nifty lost 36 points (0.85%), to settle at 4,187.40.
Reliance Industries gained Rs 15.95 or 1.16% since its closing last Friday to settle at Rs.1388.25. The company announced ambitious plans to revive and strengthen its Vimal brand of clothing.
Infosys Technologies was in the news for it being reportedly close to acquiring a European company in the manufacturing vertical for $100 million. The stock gained by Rs 101.80 (4.50%) since its last week closing to settle at Rs.2361.65
Bharti Airtel was down Rs 18.25 or –2.37% at Rs.752.80, compared to its last week closing. The company recently overtook Infosys Technologies in terms of market capitalization and is going strong with its robustly increasing subscriber base.
Reliance Communication stayed volatile during intra week trading and ended the week in the red losing Rs 15 or 3.06% to settle at Rs 475.55. The company raised a huge $1 billion through a convertible bond issue. The company is battling Britain's Vodafone Group and other domestic firms in its bid to buy rival Hutchison Essar
ICICI Bank put on 5.03% or Rs 47.55 last week to settle Friday at Rs.992.10. The bank announced 6 February ’07 having raised interest rates on home loans and corporate loans by 100 basis points. Customers would now incur an interest rate of 10.5% on floating rate home loans, while the fixed home loan will now invite an interest of 12.5%. Besides home loans, a rate hike of 100 basis points for auto loans, two-wheeler loans and loans against shares is also on the cards.
Indiabulls Financial Services (IBFSL) gained Rs 3.80 (0.90%) to settle Friday at Rs.423.85, after the company said it was considering various restructuring options, including the transfer of its stock-broking business, in favour of a separate company. The new company will then be listed on the stock exchanges. IBFSL has three businesses: stock-broking, consumer finance and housing finance. The real estate venture, Indiabulls Real Estate (IBREL), was demerged in December 2006
Recently listed auto component maker Autoline Industries surged by Rs.113.75 or 37.89% last week to settle Friday at Rs.413.95. The company made only a modest debut at Rs 261.15 on BSE on 31 January 2007 compared to the IPO price of Rs.225.
Punjab Tractors gained a huge 36.24% or Rs.89.90 over last week to close Friday (09.02.07) at Rs.338, amid reports that several auto companies were interested in bidding for private equity firm Actis’ 29% stake in the firm. The Tatas and the Mahindra & Mahindra group are reportedly among the major bidders for the private equity firm's holding in the north-India based tractor unit.
FIIs were net buyers in equity by Rs 1546.40 crore as per data available for the first three days of the week. The net figure for the month of February stands at Rs 1741.30 crore.
Mutual funds were net sellers in equity by Rs –424.72 crore as per data available for the first four days of the week. The net figure for the month of February stands at Rs –394.58 crore.