Weekly Wrap: Sensex gains 1.5% despite setback on final session

Last Updated: Sat, May 04, 2013 04:06 hrs

Despite recording notable losses on the final session, the benchmark indices Sensex and Nifty ended with impressive gains last week (April 29 - May 3, 2013), with some upbeat results from India Inc and a fairly steady trend in global markets aiding sentiment.

The Reserve Bank of India, unveiling its monetary policy on Friday (3 May 2013), cut repo rate by 25 basis points to 7.25%. It left the CRR unchanged at 4%. The central bank said that the balance of risks stemming from its assessment of the growth-inflation dynamic provides little space for further monetary easing, and this view weighed on sentiment and triggered a sell-off in the market.

The apex bank said the wholesale price inflation will be in a range around 5.5% during the current financial year. The bank said it will take steps to contain inflation to a level of 5% by the end of fiscal 2014, using all instruments at its command.

Recording gains on three of the four sessions (the market was closed on Wednesday, 1 May 2013, for Maharashtra Day), the Sensex ended the week with a gain of 289 points or 1.5% at 19,576. The Nifty closed higher by 73 points or 1.2% at 5,944. The BSE Midcap index moved up 1.6%, while the Smallcap barometer ended just marginally up.

The market started the week on a firm note with a positive trend in global markets aiding sentiment. The Sensex ended more than 100 points up on Monday.

With several stocks extending their gains amid hopes of buoyant results and a rate cut announcement from the central bank, the market ended higher on Tuesday as well. The Sensex moved up by 117 points.

The bulls came back even stronger on Thursday, after a holiday on Wednesday, and lapped up stocks, particularly those from rate sensitive banking, automobile and realty sectors, amid expectations of a rate cut from the central bank the following day. The Sensex closed stronger by over 230 pointsand the Nifty moved up by 69 points.

Despite a 25 basis points cut in Repo rate, the market tumbled on Friday, with investors pressing sales, following the central bank's statement that the assessment of the growth-inflation dynamic provided little space for further monetary easing. The Sensex lost around 160 points and the Nifty declined by 55 points.

Hindustan Unilever turned in a sparkling performance during the week, with an announcement from the company's foreign parent Unilever Plc about an open offer to acquire additional stake in the Indian unit triggering some heavy buying at the counter. Upbeat quarterly results from the company too contributed to the stock's upmove.

Hindustan Unilever gained over 23% last week, and hit a new high as well. On Tuesday, Unilever Plc, HUL's foreign parent announced an open offer to acquire additional 48.70 crore shares or 22.52% stake in HUL, at Rs 600 per share. Hindustan Unilever's net profit for the quarter ended March 2013, saw an 18% rise to Rs 781 crore. Another FMCG heavyweight ITC, which too hit a new high, ended the week with a gain of around 3.7%.

Reliance Industries ended the week with a gain of a little over 1%. The company announced on 30 April, that its telecom unit Reliance Jio Infocomm has joined a consortium of telecom companies building a submarine cable system to link Malyasia and Singapore with the Middle East.

Automobile stocks turned in a mixed performance last week, amid mixed sales data for April. While Maruti Suzuki (down marginally), Tata Motors (down 3.7%) and Bajaj Auto (down 4.2%) declined, Mahindra & Mahindra (up 7.7%) and Hero Motocorp (up 0.8%) ended on a firm note.

Banking sector heavyweights State Bank of India, ICICI Bank, HDFC Bank, Axis Bank, Punjab National Bank and Bank of Baroda, all ended the week on the negative side.

On the back of some positive news out of the U.S., information technology stocks had a fairly good outing last week. Some stock specific news like the contract won by Infosys from Mongolia's largest private bank Golomt Bank, too aided the sector. While Infosys moved up by 4.3%, Wipro and Tata Consultancy Services gained 7.7% and 3.7%, respectively.

Sun Pharmaceutical Industries, Tata Steel and NTPC closed with impressive gains last week, while Cipla, HDFC and GAIL India posted notable losses.

According to a survey, Indian factories last momentum in April 2013 as output grew at its weakest pace in over four years. The HSBC Manufacturing Purchasing Managers' Index, fell for the second straight month in April, dipping to 51, the lowest since November 2011.

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