It was a fairly good outing for stocks on the Indian bourses last week (December 29, 2008 - January 2, 2009) as the mood remained positive, thanks to a fairly steady trend in global markets and on expectations of a strong fiscal stimulus and a steep rate cut.
Of the last three sessions of year 2008, the market ended on a firm note on the first two, but wilted under pressure and closed in the negative territory on Wednesday. But it rebounded back well and ended the week on a high note, as the bulls charged back with vigour on expectations of some positive announcements from the government and the apex bank.
As expected, the RBI has cut repo and reverse repo rates by 100 basis points each to 5.5% and 4% respectively. It cut CRR by 50 basis points to 5%. The government, on its part, has enhanced the spending power of state governments, offered additional sops to exporters, allowed infrastructure NBFCs to access ECB and allowed Indian Infrastructure Finance Company (IIFCL) to raise Rs 30,000 crore through tax free bonds. These announcements from the RBI and the government came after market hours on Friday.
Besides expectations of a second stimulus package from the government and a rate cut by RBI, the return of FIIs also contributed to the rally last week. Inflation rose 6.38% in the year to December 20, 2008, lower than a rise of 6.61% in the previous week. However, there was a negative news flow in the form India's export figures. India's exports declined by 9.9% in November 2008, a negative growth for the second month running due to a slowdown in major global markets.
While the Sensex ended the week with a gain of 629.30 points or 6.75% at 9958.22, the Nifty moved up by 189.50 points or 6.63% to 3046.75. It was a pretty good week for midcap and smallcap stocks as well. In fact, both the BSE Midcap (up 9.16%) and Smallcap (9.07%) outperformed the premier indices.
After a negative start and a subsequent weak spell, the market bounced back smartly in afternoon trade on Monday, thanks to strong buying across the board. The late recovery on the Asian bourses, the positive start in European markets and higher US index futures aided the sentiment in afternoon trade. Hopes of a strong stimulus package from the government and another round of rate cut also contributed to some hectic buying that day. The Sensex ended the day with an impressive gain of 204.60 points or 2.19%. The Nifty gained around 65 points or 2.27% in that session.
Satyam Computer Services opened on a firm note on Monday and gained in strength as the session progressed. The stock tumbled from a high of Rs 159.60 to around Rs 140 after the company confirmed that two of its directors had tendered their resignation from the board, but bounced back amid high volatility to end at Rs 148.25, with an impressive gain of 9.45%.
Tracking firm Asian markets, equities opened on a positive note on Tuesday but drifted lower and remained quite choppy for around a couple of hours as participants stayed wary of building up positions. However, following a positive close on the Asian bourses and a steady start in European markets, buying resumed in afternoon trade and the Sensex finally ended with a handsome gain of 183 points or 1.92%. The Nifty surged by 57.30 points that day.
With participants staying wary of building up positions, it was a negative close for the market on the final session of calendar year 2008. The Sensex, which opened with a positive gap of around 90 points at 9806.64, plunged to a low of 9587.92 in intra-day trades, ended the day at 9647.31, with a loss of 68.85 points or 0.71%. The Nifty settled at 2959.15, recording a loss of 20.35 points.
The bulls stormed the ring at the stroke of the opening bell, went on a rampage in afternoon trade and eventually guided the market to a bright close on the first session of Year 2009. While the 30-stock BSE Sensex ended the session with a gain of 256.15 points or 2.66% at 9903.46, the broader 500-stock Nifty index of the National Stock Exchange ended stronger by 74.30 points or 2.51% at 3033.45.
If the positive close on Wall Street was the trigger for the market in morning trade, the data on inflation contributed to its sparkling display in afternoon trade. As expectations of a rate cut grew stronger following declining inflation, shares from rate sensitive realty, auto and banking sectors were in demand during that session.
The market opened on a positive note on Friday, but slipped into the red after a while as a few blue chips faced stiff resistance at higher levels. Though it bounced back soon, thanks to buying in realty, bank, capital goods and power stocks on the back of reports that the government would announce a fiscal package later on in the day, the market had to settle with modest gains as investors chose to book profits at higher levels. The Sensex ended the day with a gain of around 55 points while the Nifty edged up by 13 points.
Satyam Computer Services, which had tumbled to a new multi-year low of Rs 114.65 in the previous week, was the top gainer in the Sensex last week. The stock ended with a hefty gain of 31% at Rs 177 on the back of reports that some prominent MNCs are looking at buying a stake in the company.
Reliance Communications (22.1%) vaulted following the company announcing the rollout of GSM services across the country. Jaiprakash Associates spurted 18.7%. Reliance Infrastructure, Ranbaxy Laboratories, Hindalco, ICICI Bank and Tata Motors gained 12.5% - 16.5%.
Tata Motors and Larsen & Toubro gained around 10.5%. DLF, Tata Steel, BHEL, Mahindra & Mahindra, ACC, Wipro, State Bank of India, HDFC, Maruti Suzuki, Reliance Industries, Tata Power, ONGC and Tata Consultancy Services moved up by 5% - 9%. HDFC Bank, NTPC, Bharti Airtel, ITC, Grasim Industries and Infosys Technologies also ended on a positive note.
Hindustan Unilever (down 2%) was the only loser from the Sensex pack last week. Among Nifty stocks, BPCL (down 2.9%), Tata Communications (down 0.9%), Sun Pharmaceuticals (down 0.8%) and Zee Entertainment (down marginally) closed in the negative territory.
Unitech shot up by 28.5%. SAIL gained nearly 20%. Suzlon Energy zoomed 13.5%. Nalco ended nearly 13.5% up. ABB (12.5%), Siemens (11.8%) and Idea Cellular (11.7%) also ended with hefty gains. HCL Technologies, Cairn India, Punjab National Bank, Reliance Petroleum, Reliance Power, Cipla, Ambuja Cements, Power Grid Corporation and GAIL India ended with handsome gains.
India Infoline, Gujarat Minerals, Godrej Industries, Nagarjuna Construction Company, GMR Infrastructure, Lanco Infratech, GVK Power, Hindustan Construction Company, NMDC, IDFC, GE Shipping, Bajaj Financial Services, Triveni Engineering, Parsvnath Developers, Rashtriya Chemicals & Fertilizers, India Bulls Real Estate, Welspun Gujarat, Alstom Projects, Chambal Fertilizers and Shipping Corporation of India were among the prominent gainers last week.
Among the sectoral indices, BSE Metal and Realty closed stronger by an identical 12.34%. While expectations of a pick up in demand for new homes following rate cuts buoyed up realty stocks, the firm trend in global metal prices triggered some hectic buying in the metal space last week.
The Capital Goods index spurted 10.4%. The Bankex, Auto, CD, IT, Power, PSU, Teck and Oil & Gas indices surged 5.5% - 9.25%. The pharma index, BSE HC ended with a gain of 3.66% while the FMCG barometer moved up by 1.38%.