Amid high volatility, the benchmark stock indices Sensex and Nifty managed to record modest gains during the week ended 28 November 2008. While the Sensex posted a gain of 177.51 points or 1.99% and settled at 9092.72, the Nifty surged 61.65 points or 2.29 to 2755.10.
There were a few positive developments during the week under review. The central bank of China announced a steep cut in interest rates and triggered expectations that central bank of other nations would follow suit. China's central bank cut benchmark lending and deposit rates by 1.08% for the fourth time in about two months. The US government announced measures to pull Citigroup Inc out of trouble.
Back home, inflation continued to ease and the GDP figures turned out to be better than what the market had expected. Inflation rose 8.84% in the 12 months to 15 November 2008, slightly below the previous week's annual rise of 8.9%. Inflation has been climbing down since peaking at 12.91% on 2 August 2008.The gross domestic product grew 7.6% in the second quarter ended September 2008 from a year earlier. The growth was, however, lower than previous quarter's 7.9% rise.
However, the market could not take off and record a strong enough upmove last week as a gruesome terror attack on the country's capital hub on Wednesday night forced the authorities to keep the exchanges shut on Thursday. Trading did resume on Friday but participants were not willing to make fresh commitments and were just seen indulging in some short-covering ahead of expiry of November series derivatives contracts.
Shrugging off a negative start, the market rebounded into the positive territory on Monday but struggled to make a headway after faltering into the red immediately thereafter. Finally, thanks to some hectic buying in a few front line stocks in late afternoon trade following a steady trend on the European bourses, the market regained a substantial portion of lost ground and the Sensex, which had tumbled to a low of 8701.93 in intra-day trades, ended with a marginal loss of 12.09 points. The Nifty swung in a range of around 107 points - it hit a high of 2740.35 and a low of 2633.80 in that session - settled at 2708.25, netting a gain of 14.80 points or 0.55%.
The rally on Wall Street and the firm trend on the Asian bourses triggered a firm start on Tuesday. However, a severe bout of selling pressure that erupted a little past mid afternoon took the wind out of the market and pushed the key indices down into the red. The Sensex ended the day with a loss of 207.59 points or 2.33% while the Nifty closed lower by over 50 points or 2%. The negative start on the European bourses and weak US index futures contributed to the slide. Also, short term traders and operators appeared keen on booking whatever profits that were available.
On Wednesday, global cues were not any encouraging and due to this, participants appeared quite reluctant to hold positions at higher levels. But a surprise announcement of a rate cut by the central bank of China did its bit to trigger some hectic buying in blue chips in the closing minutes. Heavy short-covering in the derivatives segment was the other significant reason for the market's sharp rise in the closing minutes of the session today.
The Sensex, which had tumbled to a low of 8658.53 after a positive start, ended the session with a handsome gain of 331.19 points or 3.81% at 9026.72, not far down from its intra-day high of 9061.72. The Nifty registered a gain of close to 100 points.
Despite lower inflation and better than expected GDP figures and positive global markets, equities struggled for support on Friday as investors were in no mood to pick up stocks. After a positive start and a subsequent fall, the market remained rangebound for a while and then declined sharply into the red around noon. However, on frenzied buying in a few front line stocks - information technology majors were the ones that led the rally - the Sensex rallied to 9157.62 in late afternoon trade and eventually settled for the day at 9092.72 with a sharp gain of 66 points or 0.73%. The Nifty, however, ended flat.
Tata Consultancy Services (10.2%), Bharti Airtel (8.4%), Sterlite Industries (8.3%), HDFC Bank (7.4%), BHEL (6.2%), NTPC (6.2%), Tata Power (6.1%), Wipro (5.9%), Maruti Suzuki (4.8%), ICICI Bank (4.7%), Infosys Technologies (4.7%), HDFC (4.6%) and Reliance Infrastructure (3.6%) closed on a firm note last week.
Hindalco, Tata Motors, ACC, ITC and Satyam Computer Services also ended with notable gains. ONGC, HUL, Reliance Industries and DLF closed with small gains.
Hero Honda rallied 13.1%. Cipla notched up a gain of 8.9%. BPCL, Idea Cellular, SAIL, Reliance Power, Cairn India and GAIL India also ended on a high note.
Realty stock Unitech tumbled by nearly 28%. Siemens plunged 18.6% on disappointing results. Suzlon Energy went down by 15.8%. Ambuja Cements, Zee Entertainment, Reliance Communications, Tata Communications and HCL Technologies also declined sharply.
Among the sectoral indices, BSE Realty eased by 5.13%. The Capital Goods index lost 2.58%. The PSU and Consumer Durables barometers declined marginally.
BSE IT moved up by 4.13%. The FMCG, HC, Power and Teck indices gained 2.5% - 3%. BSE Bankex, Oil & Gas and Auto gained over a per cent. The Metal index posted a marginal gain. BSE Midcap and Smallcap indices ended lower by 1.06% and 2.54% respectively.