First week of 2012 ends in green

It was a volatile week for the Indian markets, with the Sensex closing 2.55% higher and the Nifty up by 2.65%

Major news for the week

Factory activity hits six-month high

November exports rise 3.9%

India's services sector grows at fastest pace in 5 months

Union Budget to be presented after March 9

Food inflation at -3.36% vs 0.42%

Govt to notify 100% FDI in single brand retail soon

RBI likely to ease policy: Subbarao

Govt allows foreign individuals to play in stock markets



Also Read: Markets down 4% in December

Indian markets

The Indian markets were volatile in the first week of 2012 and closed in the positive terrain. Investor risk appetite returned in the markets tracking improved global sentiment after encouraging data from China, Australia, US and India.

Also, the government's decision to allow qualified foreign investors to invest directly in local equities helped markets. A sharp decline in food inflation brought some relief. Comments by Reserve Bank of India governor that the central bank is likely to begin easing monetary policy to address concerns about economic growth also aided sentiments. However, there were concerns about upcoming Q3 earnings.

There was a special two hour trading session on Saturday as the NSE was upgrading its Futures & Options system. It was live between 11:00 am and 12:45 pm.

The Sensex swung 647 points between a weekly high of 16005 and a low of 15358 and closed the week higher by 2.55% or 394 points at 15849. The Nifty swung 207 points between a weekly high of 4795 and a low of 4588 and closed the week higher by 2.65% or 123 points at 4747.

Global indices

Most of the global markets were in green this week. Gainers — Dax 100 up by 2.71%, Nasdaq up by 2.65%, Sensex up by 2.55%, FTSE 100 up by 1.39%, Dow Jones up by 1.17% and Hang Seng up by 0.86%. Losers — Shanghai Composite down by 1.64%, Nikkei down by 0.77% and CAC 40 down by 0.71%.

Sectoral and stock screening

All the sectors closed the week in the green zone barring BSE FMCG down by 0.30%. The major gainers - BSE CG rose by 6.22%, BSE PSU gained by 6.18% and BSE Bankex up by 6.02%.

Coming to 'A' group stocks, top three gainers of the week - MMTC jumped by 69.06%, Hindustan Copper advanced by 59.97% and Rashtriya Chemicals & Fertilizers (RCF) surged by 46.37%. Top three losers of the week - Bajaj Auto tumbled by 9.28%, Hero MotoCorp dropped by 9.09% and Adani Enterprises declined by 8.56%.

FII/MF activity

The foreign institutional investors (FIIs) were net buyers of the Indian stocks this week to the tune of Rs1006 crore. The domestic investors purchased Indian stocks worth a net of Rs70 crore during the week till January 05, 2012.

Market Outlook

Focus will be on Q3 December 2011 results. IT bellwether Infosys and housing finance major HDFC kickstart the Q3 December 2011 earnings season on Thursday 12 January 2012, among major companies.

On the macro front, data on industrial production for November 2011 on Thursday, 12 January 2012, could provide cues on the central bank's likely policy stance at the third quarter review of Monetary Policy 2011-12 scheduled on 24 January 2012. On the global front, the euro-zone debt worries may continue to impact sentiments.