Mkts post best weekly gain of 2011; indices rise 5%

Major news for the week:

Food inflation rises to 10.05% vs 9.42%

SEBI plans new rules on MF sales

JSW Steel raises offer price for Ispat

Wockhardt gets stay on winding up order from HC

FM rolls back 5% service tax on healthcare



Indian indices

Domestic indices rebounded this week with a spectacular bounce back from last weeks heavy sell-off on the back of bargain hunting. Indices registered their best weekly gain of 2011 this week with both the benchmark indices - Sensex and Nifty - closing the week on a buoyant note with gains over 5% each. The FIIs (Foreign Institutional Investors) buying action also raised market sentiments during the week.

Bullish comments on India from billionaire legendary investor Warren Buffett aided to the rally. Both the indices breached crucial resistance levels of 1800 and 5600.

Billionaire investor and international investment icon Warren Buffett who is in his maiden visit to India said on Tuesday, 22 March 2011, that he hopes to spend some money in India. His firm Berkshire Hathaway is looking to park funds in large investment destinations and India fits the bill perfectly, he said. India, according to him, is not an emerging market but a very big country with a large number of significant businesses. He said that Berkshire Hathaway would look at possible acquisitions in India as and when there were opportunities.

Markets were on a roll this week ignoring the negative news of India’s food inflation rising to 10.02% for the week ended March 12, 2011 from 9.42% seen in the previous week.

During the week, the Sensex regained its significant level of 18000. The Sensex and Nifty swung 1066 points and 319 points respectively this week. Sensex ended the week at 18879, higher by 937 points and Nifty shut shop at 5654, higher by 281 points.

Global indices

Global markets bounced back from the last week’s heavy sell-off and posted huge gains this week. Cooling down of crude oil price and stabilization of Japan’s nuclear crisis and rally in global markets boosted sentiments.

During the week, Sensex outperformed its global peers by posting gains of 5.22%. While rest of the global indices ended the week with over 2% gains.

Sectoral and stock screening

All the sectoral indices ended the week with huge gains. BSE Realty leading the gainers pact with registering gains of 8.99%, followed by BSE Bankex that rose by 6.09% and BSE Information Technology (IT) surged 5.74%. Rest of the indices ended the week higher in the range of 2.64-5.62%.

Coming to 'A' group stocks, Hindustan Oil Exploration Company was the star performer of the week, surging 22.66%, followed by DLF that rose by 13.15% and Indiabulls Real Estate that advanced by 12.84. Among laggards, D B Realty was the worst performer by posting loss of 13.70%, followed by Ranbaxy Laboratories slid by 5.98% and National Aluminium Company dropped by 5.95%.

FII/MF activity

The foreign institutional investors (FIIs) were back in action this week by turning net buyer and bought net of Rs529.40 crore equities from the Indian markets. The domestic institutional investors (DIIs) turned sellers this week and sell Indian equities worth a net of Rs27.7 crore

Outlook

Events like Derivatives expiry and sales number of Auto and Cement firms will determine market direction next week. Development in the world's third largest economy - Japan and Portugal’s debt crisis, may continue to remain a concern. Crude oil prices will also remain in focus owing to unrest in the Middle East and North Africa.