The shortened week came as a blessing in disguise with markets factoring the negative cues from higher inflation and weaker global cues. The indices were on a positive trail to rise on all three trading days of the week, with Sensex majors as well as the mid-caps roaring with action. Infosys results acted as a major boost to the markets, with the ailing tech sector helping the markets gain positive momentum. The BSE benchmark index rose by 4.50 per cent for the week, or 674 points, for the week to close at 16,481. Nifty too had positive closing for all trading days of the week, gaining 180 points or 3.76 per cent for the week.
Crude prices were on a rising spree once again as low US inventories, along with fresh violence in Nigeria helped the prices to hit new peaks. Crude prices moved to new highs at $117 gaining 6 per cent for the week.
World Markets
World indices were quoting higher mainly on back of rise in the US markets. The Dow and Nasdaq registered weekly gains of over 4 per cent each on better earnings data. Nasdaq rallied, after Intel announced better than expected results, posting its highest weekly gain since 2006. Asian markets were trading lower at start of week but recovered ground towards the close, with Nikkei closing higher while Hang Seng and Shanghai closed lower. European markets followed the US markets with most of the markets rising by over 3% each.
Sectoral Indices
The tech & IT sector came back with a vengeance with tech major Infosys coming out with better results. The BSE IT index gained by 14 per cent with IT biggies Infosys, Wipro and TCS all positing double digit gains on a weekly basis. Oil and gas continued to extend its gains over the previous week and continued to be an outperformer. The BSE Oil & Gas index has gained over 10 per cent since the beginning of the current month. All the sectoral indices managed to post higher closing than the previous week, with most of them rising by 3-5 per cent each. Healthcare index gained by over 6 per cent, after Ranbaxy stock gained by 10 per cent for the week. Cement stocks were the only laggards for the week, after the govt banned fresh exports of cement to tame the rising inflation levels. Metals stocks too rebounded from lower levels as prices on the LME were seen rising.
Mid-cap action
Mid-caps and small-caps continued to gain positive momentum after last weeks weekly gains with both the indices adding 5 per cent over the previous week. Mid-cap stocks were roaring with action on higher volumes ahead of the earnings season. Tech and IT stocks were the biggest gainers in the mid-cap space on reports of many second rung companies scheduled to announce buy-back plans. Textiles stocks were a surprise gain in the last week, with Bombay Dyeing gaining by 30 per cent after the company announced to move forward in their reality plans. Century Textiles, Alok Textiles, and Arvind Mills were some other prominent gainers. Fertilisers came back into action after the MET department forecasted a normal monsoon for the current season. Chambal Fertiliser gained 45 per cent while Nag Fertiliser added 30 per cent. Mid-caps PSU banks too were quoting higher, with inflation easing a wee bit from levels of 7.41 per cent to 7.14 per cent.
Expect breakout from trading range, Markets to gain positive momentum.
Markets managed post a 3-day gain in succession, a phenomenon which was very rare since the past one month in the holiday curtailed week. Indices rallied by over 4 per cent each to close on an upbeat note and closer to its trading range of 5000 – 4650. The Q4 numbers have started to flow in with the tech sector announcing better than expected results. Expect markets to gain positive momentum in the next weeks and breakout out from its trading range above 5K very soon. A sustained move over 5000 could take the markets much higher to 5100-5130 levels. On the lower side, 4890-4900 are important supports. Expect stock selective movements and accumulate stocks at declines. Sugar stocks look attractive at current levels. Renuka, Bajaj Hindustan would be the best trading stocks.
Stocks to watch
PUNJ LLOYD: Stock could rise to 370-375 levels in coming week. The support exists at 330-331.
Metals & OIL/Gas too could outperform.