Market glitters in festive week, ends 6% higher

There was a festive mood on the Dalal Street this week. The Sensex surged by 6.07% and the Nifty gained by 6.15%

Major news for the week

RBI hikes repo rate by 25 bps

Food inflation accelerates to 6-month high

Sterlite Industries Q2 net profit declines by 35%

Union Bank on India Q2 net profit up 16%

ITC Q2 net profit surges by 21%

NTPC Q2 net profit rises 15%



Indian indices

It was a festive week and the Indian markets gave its best in all the trading sessions of the week. The markets erased previous week’s losses and ended the truncated week with a 6% gain on account of two reasons — one is the finally much awaited bailout plan for the Eurozone got approved on Wednesday (October 26, 2011) in the EU summit and the second is the likely pause in rate hikes from RBI in the next policy.

The markets were closed for Diwali on Thursday (October 27, 2011), and there was less than two hours of trading in the Muhurat session on Wednesday.

During the week, the debt package that came out of the European Union meet to help contain the region's two-year debt crisis, resulted in one of the strongest global market rallies in recent times. It was a relief for markets which have remained under stress owing to uncertainty in Europe. Additional support came from data showing the US economy grew in the third quarter at its fastest pace in a year, bringing relief to investors who weeks ago feared the world's largest oil consumer would lapse into another recession.

Back home, the Reserve Bank of India set the tone for the rally on Tuesday (October 25, 2011) when it raised benchmark rates by 25 basis points as was widely expected, but surprised the market with an indication that it may not raise rates at the next review meet in December.

So the data flow coming in from global and local has sparked a rally this week. The Sensex swung 1122 points between a weekly high of 17908 and a low of 16786 and closed the week higher by 6.07% or 1019 points at 17805. The Nifty swung 362 points between a weekly high of 5400 and a low of 5038 and closed the week higher by 6.15% or 311 points at 5361.

Sectoral and stock screening

All the sectors closed the week in the green zone barring BSE CD down by 1.08%. The major gainers — BSE Metal was the top performer of the week rising by 9.39%, BSE Realty gained by 8.48% and BSE Auto up by 8.17%.

Coming to 'A' group stocks, top three gainers of the week – Hindalco Industries jumped by 16.89%, Reliance Infrastructure surged by 16.47% and Tata Motors rose by 15.88%. Top three losers of the week – Union Bank of India tumbled by 7.48%, Sun TV Network declined by 3.80% and Indiabulls Financial Services fell by 3.79%.

FII/MF activity

The foreign institutional investors (FIIs) bought Indian shares to the tune of Rs423 crore this week. The domestic investors sold Indian shares worth a net of Rs77 crore this week.

Global signals

All the global indices posted strong gains this week. Hang Seng up by 11.06%, Dax100 up by 6.28%, Sensex up by 6.07%, CAC40 up by 5.59%, Shanghai Composite up by 5.11%, Nikkei up by 4.28%, FTSE100 up by 3.89%, Nasdaq up by 3.78% and Dow Jones up by 3.58%.

Outlook

Stock-specific activity may dominate trade in the near-term as Q2 earnings season gathers steam. Automobile and cement companies’ stocks will be eyed as they will release their sales volume data for October 2011 from Tuesday (November 01, 2011). Europe will continue to remain in focus and any news from there may impact the sentiments.