Weekly Wrap: Sensex marches on, ends at near 29-month high

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According to the data available from the exchanges, FIIs, who bought shares worth a net Rs 10,350 crore last month, have bought shares worth more than Rs 11,600 crore in February 2012.

After a shaky start and some listless movements, the market found some support in the final hour on Monday after PSU banking heavyweight State Bank of India came out with better than expected quarterly results. However, a significant rise in the bank's non-performing assets dragged the stock down and limited the market's gains to a substantial extent. The Sensex, which spurted nearly 200 points from the day's low, ended the day with just a marginal gain of 24 points. The Nifty too edged up marginally.

Despite buoyant inflation data, gains were modest on Tuesday with the Sensex moving up by around 76 points and the Nifty ending higher by 26 points, as a section of investors appeared keen on booking some profits.

According to the data released by the government on Tuesday, headline inflation fell to an over two-year low of 6.55% in January on cheaper food items. It had stood at 7.47% in December 2011 and was 9.47% in January last year. Food inflation was (-) 0.52% in January against 0.74% in December. Inflation in the fuel and power segment stood at 14.21% on an annual basis in January, against 14.91% in the previous month.The government revised upwards the November 2011 inflation to to 9.46% from provisional estimate of 9.11%.

On Wednesday, the Sensex hit the magical 18,000 mark right at the stroke of the opening bell, jumped to 18,231 and eventually ended the day with a gain of over 350 points at 18,202. The Nifty closed with a gain of 116 points at 5542. Heavy buying by FIIs, a strong trend in global markets and expectations of lower interest rates and some upbeat earnings reports lifted sentiment that day. Though cues from Wall Street were flat, the mood on the Asian European bourses were quite bullish that day amid easing worries about the eurozone economy following the Chinese government pledging its support to pull Greece out of the debt trap.

And then, after suffering a setback of Thursday, due largely to profit taking after strong gains in the previous session, the market reverted to winning ways on the final session of the week thanks to some upbeat U.S. economic data. The Sensex, which lost about 48 points on Thursday, recorded a gain of 135 points on Friday, while the Nifty posted a gain of 42 points on the final session, after declining marginally on Thursday.

NTPC moved up sharply last week after the company won a court case against utility boilers-maker Ansaldo Caldaie Boilers, a unit of Italian boiler maker Ansaldo Caldaie SpA. With the verdict paving the way for the company to place bulk orders for boilers based on supercritical technology, power stocks had a great outing last week.

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State Bank of India, ICICI Bank, HDFC Bank, DLF, Infosys, Larsen & Toubro, Maruti Suzuki, Hero Motocorp, Mahindra & Mahindra, Tata Motors (the stock jumped on upbeat quarterly results and strong global sales) and Sterlite Industries posted strong gains last week. Cipla lost over 7.5%. Reliance Industries and Coal India also ended the week on the negative side.

Thanks to a highly bullish undertone, there was hectic activity at sevearl side counters last week. Despite losing some ground during the later part of the week, the Midcap and Smallcap indices gained 4.8% and 3.3%, respectively.