The Indian stock market saw some bright spells, the brightest of them came about on Friday, during the truncated week ended 18 October 2013, with investors, presumably FIIs, indulged in some hectic buying amid hopes the U.S. Federal Reserve will continue to its asset purchase program at least till March next year.
The U.S. lawmakers struck a deal to raise the borrowing limit of the government and end a partial shutdown, barely a couple of days ahead of the deadline. The move by the lawmakers helped lift sentiment on the global bourses during the later part of the week.
With the rupee gaining in strength against the greenback and some top notch companies from India Inc coming out with impressive quarterly numbers, the mood on the Indian bourses was fairly bullish for much of the truncated week.
According to the data available with the exchanges, foreign institutional investors have bought shares worth a net Rs 7000 crore (approximately) in the current calendar month (till Thursday, 17 October), contributing substantially to the market's impressive upmove. So far, FIIs have bought shares worth a net Rs 80,174 crore this calendar year.
The BSE benchmark Sensex, which recorded a hefty gain of 467 points or 2.3% on the final session, ended the week with a gain of a little over 350 points or 1.73% at 20,882.89, less than 350 points down from its all-time high of 21,206.77, recorded on 10 January 2008. Friday's close was the barometer's best in almost 3 years. It touched a high of 20,932.23 in intraday trades on Friday.
The Nifty index of the National Stock Exchange, which soared to 6201.45 in late afternoon trades on Friday and ended the day with a gain of 143.50 points, recorded a gain of of 93.15 points or 1.53% for the week, closing at 6189.35.
It was a positive start for the market last week, although gains were somewhat modest. The Sensex added about 79 points that day, due largely to some heavy buying by FIIs. The Nifty gained 16.50 points in that session.
After some listless movements amid lackluster trades at times, the market ended lower on Tuesday. A surge in wholesale price inflation in September raised doubts about any rate cut in the near future and prompted investors to trim down positions to an extent. The BSE barometer ended the day with a loss of nearly 60 points, while the Nifty closed down 23.65 points.
After Wednesday's holiday on account of Bakrid, the market had another dull session on Thursday, with investors shrugging off the positive news about the U.S. lawmakers striking a deal to temporarily raise the nation's debt ceiling and to end the partial shutdown of the government. The Sensex ended 132 points down that day, while the Nifty declined by around 43 points.
With investors betting on hopes the US Federal Reserve will continue its monetary stimulus in order to spur growth, stocks rallied sharply on Friday. The rupee's rise and a fairly encouraging Chinese GDP data too aided sentiment during the session.
Thanks to positive news out of China, metal stocks were in demand on Friday. Several top notch stocks in the metal space, including Tata Steel, Sesa Sterlite, Hindustan Zinc, Jindal Steel & Power, SAIL and JSW Steel ended the week on a firm note, recording handsome gains.
Index heavyweight and oil sector major Reliance Industries moved up nearly 5%. On Monday, the company said its net profit rose 1.5% Rs 5490 crore in the first quarter of fiscal 2014. However, the company's gross refining margins declined to US$7.7 per barrel in the said quarter, from US$8.4 a barrel in the quarter ended June 2013.
Profit taking after recent gains and the rupee's rise against the U.S. dollar rendered IT stocks a bit sluggish during the week. Infosys, Tata Consultancy Services and HCL Technologies all saw some bright spells during the week, with strong quarterly results triggering some buying. However, they all ended well off their highs as investors chose to book some profits.
TCS reported a net profit of Rs 4633 crore for the July - September 2013 quarter, up 20.7% from the previous quarter. The company's operating margin for the second quarter came in at a little over 30%.
Bank stocks, which saw some heavy selling during the earlier part of the week, bounced back into the reckoning later on, posting strong gains on Thursday and Friday. HDFC Bank, which came out with impressive results - its net profit rose more than 27% in the July - September quarter - ended 2.5% up.
On Friday, Larsen & Toubro reported a net profit of Rs 977.51 crore for the quarter ended September 30, 2013 as compared to Rs 1137.31 crore for the quarter ended September 30, 2012. The stock gained over 4.5% in that session.
Despite suffering some setbacks here and there, automobile stocks did reasonably well during the week. Bajaj Auto ended with a modest gain. The two and three-wheeler maker reported a 13% jump in net profit for the quarter ended September 2013.
According to the data released by the government on Monday, inflation based on the wholesale price inflation accelerated to a seven-month high in September 2013, due mainly to a surge in prices of crude oil and non-food primary articles. Core inflation accelerated to 2.06% in September 2013 from 1.97% in August 2013. Inflation for July 13 was revised upwards to 5.85% from 5.79% reported earlier.
Meanwhile, the annual rate of inflation based on the combined consumer price index for urban and rural India rose 9.84% in September 2013, from 9.52% in August 2013. The CPI inflation for rural and urban areas rose 9.71% and 9.93% in September 2013, respectively.