The market staged a remarkable rally on Thursday and the benchmark indices Sensex and Nifty shot up by 482 points (5.51%) and 132 points (4.95%) respectively as hopes of a strong stimulus package from the government to boost the economy triggered frenzied buying in bluechip stocks.
But the mood turned bearish on the final session and with several bluechip stocks crashing down following a big sell-off in afternoon trade, it was a negative close for the market last week (December 1 - 5, 2008). Recording losses on three of the five sessions, the Sensex ended the week lower by 127.52 points or 1.40% at 8,965.20. The Nifty slipped 40.70 points or 1.47% to 2714.40 last week.
Earlier, it was a weak start for the market on Monday as a negative global sentiment prompted a sell-off. The Sensex declined by over 250 points and the Nifty plunged by around 72 points in that session. For a brief while that morning, the market showed some signs of a recovery following a cabinet reshuffle. While P. Chidambaram, the erstwhile Finance Minister took charge as the new Home Minister, the Prime Minister, Manmohan Singh, took the Finance Ministry under his direct control. The recovery proved extremely short-lived.
The mood was not any significantly different in the following session though buying at lower levels aided the cause of a few blue chips and restricted the BSE barometer's loss to just around 100 points. The Nifty lost close to a per cent or 25 points that day.
The market was extremely listless on Wednesday. Though there were expectations that the government and the central bank would spell out measures to tide over the liquidity crunch, investors remained wary of holding positions at higher levels in that session. The Sensex, which moved in a range of around 250 points, ended at 8747.43 with a small gain while the Nifty closed 1.35 points down at 2656.45.
Then came the splendid surge. Expecting a solid stimulus package from the government and a liberal rate cut by the Apex bank, investors went on a buying spree that lasted the entire duration of the session on Thursday. A positive trend on the European bourses and higher index futures too aided the sentiment. As buying was quite widespread, all the sectoral indices closed on a positive note on Thursday.
Gains posted by realty, metal and capital goods stocks were more pronounced. Heavy buying was seen in oil, bank, power, telecom, cement and auto stocks as well. After remaining subdued for a better part of the session, information technology, FMCG, consumer durables and pharma stocks bounced back sharply from their lower levels and some of these stocks even signed off with impressive gains.
However, after Thursday's impressive surge, the market went into a selling mode on Friday as concerns over weakening global economy took centre stage. Save for a brief while in morning trade when it recorded a modest surge, the market spent the session deep down in the red that day.
A massive sell-off in blue chips during the final hours sent the Sensex, which had surged to 9340.69 in early trade, plunging to a low of 8914.38. Information technology stocks, which bore the brunt of the onslaught till a little past mid afternoon, were joined by a host of stocks from other sectors in a long trip down south during the fag end of the session.
SEBI's decision to extend the facility of cross margining across all segments of the market and to all categories of market participants was among the positive factors that emerged last week. Lower inflation - inflation rose 8.4% in the year through November 22, 2008, lower than previous week's 8.84% rise - and rates cuts announced by the central banks of England and Sweden and the European Central Bank were the other positives for the market last week.
A sharp drop in exports and confirmation that the US economy entered a recession nearly a year ago were among the negative reports that forced the investors on to a highly cautious mood at times during the period under review.
Tata Steel, a much battered stock in recent months, shot up by over 21% last week thanks to a sharp surge in the consolidated net profit of the company. Jaiprakash Associates rallied 18.4%. Reliance Infrastructure, Grasim Industries, ACC and State Bank of India firmed up by 4.5% - 6%.
Sterlite Industries surged 3.4%. DLF and ICICI Bank moved up by 2.5% and 2% respectively. NTPC, Reliance Communications and Larsen & Toubro ended the week with marginal gains.
Tata Motors, a big loser in recent months, recorded a handsome gain of 12.3% on hopes of some excise duty cut on trucks and buses. However, weak sales figures for the month of November 2008 pushed other automobile majors Maruti Suzuki (down 8.5%), Mahindra & Mahindra (down 10.5%), Hero Honda (down 5.3%) and Bajaj Auto (down 1.9%) down to a negative close last week.
IT stocks Infosys Technologies (down 8.5%), Satyam Computer Services (down 7.7%), Wipro (down 6.6%) and Tata Consultancy Services (down 6.5%) declined sharply due to the recession in US. Rolta India, HCL Technologies, Financial Technologies, Patni Computer Systems, Mastek and Oracle Financial Services also ended the week on a weak note.
Hindalco, ONGC, HDFC Bank, ITC, HDFC, BHEL and Reliance Industries lost 1% - 6%. Bharti Airtel, Hindustan Unilever, Tata Power and Ranbaxy Laboratories had a few bright moments during the week, but still ended on a negative note.
Unitech (32.8%) was the biggest gainer in the Nifty pack. Zee Entertainment, Power Grid Corporation, Idea Cellular, Tata Communications, Ambuja Cements, Siemens and GAIL India finished with sharp to moderate gains. Cipla, Sun Pharmaceuticals, Cairn India, BPCL and Reliance Power posted sharp losses.
NDTV flared up by 42.7% last week. Sun TV Network recorded a gain of 30.6% as the promoters of the group patched up the family members of the Chief Minister of Tamil Nadu. IRB Infrastructure, LIC Housing, EIH, Bharat Electronics, CESC, HDIL, Hindustan Construction Company, Gujarat Minerals, Jindal Steel, IDFC, JSW Steel, Tech Mahindra, REI Agro, GVK Power, Dr Reddy's Laboratories, United Phosphorus, Essar Shipping and Nagarjuna Construction Company also recorded impressive gains last week.
Among the sectoral indices, BSE IT and Teck tumbled by 7.88% and 4.21% respectively. The Consumer Durables index eased by 7.52%. The Auto index lost 3.53% and the Healthcare barometer declined 2.23%. The
Oil & Gas index shed 2.19% as key oil stocks fell on an imminent cut in petrol and diesel rates. The FMCG and PSU indices also closed weak.
As realty stocks bounced back on hopes of a rate cut and release of liquidity, the BSE Realty barometer advanced by 8.4% last week. BSE Metal climbed up 5.85%. The Bankex surged 1.34% and the Power index edged up by a little over a per cent. The Capital Goods index posted a gain of 0.34%. The BSE Midcap and Smallcap indices gained 0.25% and 0.57% respectively.