Weekly Review - Sep 13 2009

The Sensex ended the week on a positive note amid strong global cues, revival of monsoons and as industrial production expanded for the second month in a row.

The Sensex crossed the 16,00 mark on Monday, a 15-month high, tracking strong global markets as China allowed more foreign portfolio investments and amid signs of monsoon revival. Finance Minister Pranab Mukherjee's statement in the G-20 meet signaling they would not end stimulus measures also helped market sentiment improve.

As the week progressed the Sensex held on to its gains due to positive news flow. India's monsoon remained above average for the second week in September. In addition to that, the factory output as measured by the index of industrial production (IIP) grew by 6.8% for the month of July primarily guided by the growth in the mining sector. The high growth rate comes even as the core sector grew at a low rate of 1.8% for the month.

The 30-share benchmark Sensex yesterday maintained its upmove for the sixth straight session. The Sensex gained 3.67%, or 575 points over previous week to close at 16,264. The Natinal Stock Exchange Nifty ended above the 4,800 level for the last four trading days. The Nifty advanced 3.19%, or 149 points to close at 4,829.

Jitendra Panda, Sr Vice President, Motilal Oswal Financial Services said, "Markets in the last four days have consolidated within the range of 30-50 points on Nifty. However, derivatives open interest have slowly and steadily increased. Implied volatility remains low indicating short term upside in the market."

Foreign institutional investors (FIIs) remained as buyers of stocks this week. They had purchased stocks worth Rs 2,940.05 crore this week, according to provisional data by BSE.

Among the sectoral indices, BSE metal index gained the most this week with a surge of 7.71%, owing to higher base metal prices. It was followed by Bankex (6.78%), Oil & gas (4.63%). The FMCG and the realty index were the losers with declines of 2.98% and 1.18%, respectively.

Hindalco jumped 18.07% over previous week close. ICICI Bank climbed 12.32%. Sterlite rose 11.25%. Tata Steel (9.07%), SBI (8.78%), Reliance (8.08%).

Among the frontliners, Hindustan Unilever slipped 6.28% this week, followed by Maruti Suzuki (5.12%), Mahindra & Mahindra (5.10%).

Dilip Bhatt, joint MD, Prabhudas Lilladher said, "Stock markets having moved up to this level, volatility will increase in coming days because valuations are not cheap and markets have become vulnerable. Nifty is expected to correct at this level and the correction is expected to be more than markets have moved up."

The Sanghai Composite and the Hang Seng gained after August data showed that Chinese industrial production grew more quickly than expected in the month. The Shanghai Composite rose 2.2% to post its biggest weekly gain in seven weeks.The Hang Seng Index gained 92 points, its highest closing level since August 2008. The index gained 4.5% this week, the best weekly performance since late July.

Reliance topped the value chart this week with a turnover of Rs 5,882 crore, follwed by Unitech (Rs 4,220 crore), DLF (4,043 crore), ICICI Bank (Rs 3,349 crore) and HDIL (Rs 3,030 crore).

IFCI led the volume chart with trades of over 427.03 million shares, followed by Unitech (376.30 million), NHPC (313.58 million), Ispat (293.68 million) and Suzlon (255.04 million).