After suffering losses in the first three sessions, the Indian stock market bounced back strongly last week (December 15 - 19, 2014) to finish with small gains.
Amid speculation the U.S. Federal Reserve will start hiking interest rates soon, global markets were struggling during the initial part of the week under review. Falling crude oil prices and concerns about the global economy on the back of some disappointing data from China and Europe too hurt sentiment. With data showing a notable increase in trade deifict and a drop in industrial production in October, the mood on the Indian bourses was not any different either.
However, after the Fed reassured that it would remain patient with regard to rate hikes, markets across the globe bounced back in style and the mood back home too turned quite upbeat. Investors were also betting on hopes the government will push reforms after the Union Cabinet gave its nod to a resolution to a constitutional amendment bill to provide the leagal framework for rolling out a nationwide goods and services tax.
A pause in the rupee's slide against the dollar and news that Primer Minister Narendra Modi has taken direct control of a project-monitoring body to fast-track investments worth US$300 billion aided sentiment.
The BSE benchmark Sensex ended the week with a gain of 21.16 points or 0.08% at 27,371.84, after plunging well below the 27,000 mark at one stage. The Nifty index of the National Stock Exchange closed up 1.10 points or 0.1% at 8225.20. Despite some strong buying in midcap and smallcap stocks during the course of the week, the BSE Midcap and Smallcap indices ended lower by 1.1% and 1.3%, respectively.
The market started the week on a weak note, hurt by downbeat industrial production and trade balance data. The Sensex ended lower by about 31 points on Monday, while the Nifty closed down 4.50 points.
And then it was a sharp move down south for the market, with stocks plunging on Tuesday amid global economic jitters following a weak reading on Chinese manufacturing activity. The Sensex declined as much as 538 points and the Nifty shed 152 point in that session.
The market ended lower on Wednesday, extending losses to a fifth straight session. However, losses were less pronounced with the Sensex going down by about 71 points and the Nifty declining by about 38 points.
Stocks came back strongly on Thursday, tracking global cues after the Federal Reserve, which sounded pretty confident about the U.S. economic recovery, said it is in no hurry to hike rates. The Sensex shot up by 416 points on Thursday, while the Nifty moved up 130 points.
It was a good session on Friday as well, with strong global cues triggering some hectic buying at several counters from across various sectors. The Sensex ended the session with a gain of nearly 250 points and the Nifty rose 66 points.
Sensex stocks ended mixed, with sixteen of them moving higher and the rest closing on the negative side.
Capital goods major BHEL, housing finance stock HDFC and oil & gas exploration major ONGC gained 3.5% to 5%. Coal India surged up 3.1%. NTPC ended 1.8% up after the company came out with a proposal to issue bonus debentures to its shareholders.
ICICI Bank gained over 2.5% and HDFC Bank ended nearly 1% up, while State Bank of India lost around 2.2%.
With the rupee trending lower against the U.S. dollar, IT stocks saw some buying last week. Strong results from Accenture too contributed to the interest in the IT space. Infosys moved up 3.3%, Tata Consultancy Services rose 2.2% and Wipro closed higher by about 1.7%.
FMCG heavyweight ITC lost over 6.%. Hindustan Unilever ended 5.4% down. Dr Reddy's Laboratories, Sesa Sterlite, Cipla, Sun Pharmaceutical Industries, Tata Motors and Hindlco declined 2.5% - 5%. Bharti Airtel shed 1.4%.
According to data released by the government, the Wholesale Price Index based inflation fell to 0% in November, compared with 7% in the previous month. The fall was due largely to a sharp fall in global commodity prices. The 'food articles' category on WPI contracted 0.4% in November.
data released on Friday showed, inflation based on the consumer price index, to have risen 4.38% annually in November, slowing for a fourth successive month. In October, inflation was up 5.52%. Food price inflation also eased further to 3.14% from 5.59% in the previous month.
Meanwhile, industrial production declined unexpectedly by 4.2% in October, the sharpest decline in three-years. The annual decline reversed a revised 2.8% rise in the prior month. The manufacturing sector's output dipped to 2.5% in October 2014, recording largest decline in last five-and-half years.
According to a report from the Ministry of Trade & Industry, India's merchandise exports rose 7.27% to $25.96 billion in November 2014 over November 2013. Imports jumped 26.79% at $42.82 billion. The trade deficit rose sharply to $16.86 billion in November 2014, from $9.57 billion in November 2013.