The Indian stock market saw some bright spells during the week ended 18 January 2013, as investors indulged in some hectic buying, on the back of some encouraging earnings and economic news.
The decision to partially deregulate diesel prices and to defer implementation of the Genearl Anti Avoidance Rules by two years, were among the most signficant factors that lifted sentiment on the bourses. Data showing a drop in inflation too played a key role in bolstering the mood. Sustained buying by foreign institutional investors contributed as well to the surge. FIIs have bought shares worth over Rs 12,800 crore this month.
The BSE benchmark Sensex notched up a gain of around 375 points or 1.9% as it ended the week at 20,093.04, while the broader 50-stock Nifty index of the National Stock Exchange gained 113 points or 1.9% to 6064.40. Midcap and smallcap stocks were mostly subdued. While the BSE Midcap index edged up marginally, the Smallcap barometer lost over 1%.
Buoyed by the government's decision to postpone implementation of the GARR by two years, investors lapped up stocks from across various sectors on Monday, lifting the Sensex and Nifty up by 243 points and 73 points respectively. A lower inflation and strong global markets too contributed to the rally that day.
Gains were not that pronounced on Tuesday, but the Sensex and the Nifty still ended on a firm note, adding 80 points and 33 points, respectively.
Amid cocerns the Reserve Bank of India might keep rates unchanged while reviewing its monetary policy later this month, the market retreated fairly sharply on Wednesday. The Sensex lost 169 points and the Nifty ended lower by about 55 points.
After a choppy ride that lasted over four hours, the market rallied on Thursday after the government alloed state-run oil marketing companies to raise or cut diesel prices by small margins periodically. Led by gains in oil stocks, the Sensex moved up nearly 150 points that day, while the Nifty gained 37 points.
Oil stocks extended their gains on Friday. Some upbeat economic data from the U.S. and China and a few impressive earnings reports from India Inc fueled the rally on Friday. Though stocks gave up a good portion of gains later on in the session, the Sensex and Nifty ended the day higher by 75 points and 25 points, respectively.
Oil stocks ONGC, Hindustan Petroleum Corporation, BPCL and Indian Oil Corporation posted hefty gains on Friday, and ended the week stronger by 11% - 22%. Reliance Industries gained over 7%. After trading hours on Friday, Reliance Industries announced that its net profit rose 24% to Rs 5502 crore in the September - December 2012 quarter, beating estimates.
Bharti Airtel gained nearly 7.5%, after the Union Cabinet approved reduction in reserve price for the auction of spectrum in 800 MHz band for CMDA by 50%. Other telecom stocks, Reliance Communications, Tata Communications and Idea Cellular also posted big gains.
FMCG heavyweight ITC gained around 5%, despite ending just modestly higher on Friday. The company reported a 20.6% surge in net profit for the quarter ended 31 December 2012.
Information technology majors Infosys and Tata Consultancy Services had a few good spells in positive territory last week, and ended higher by nearly 3% and 3.5%, respectively, thanks to impressive results. However, Wipro ended the week with a loss of 5.3% after the company reported a lower than expected IT revenue and issued a none too encouraging forecast.
Automobile major Mahindra & Mahindra ended nearly 6% down. Bajaj Auto declined by 2.8%. Hero Motocorp lost 3.7%, with weak quarterly results triggering some strong selling at the counter on Friday. Tata Motors and Maruti Suzuki also closed weak.
Hindalco ended lower by 3.3%. Sun Pharmaceutical Industries, Cipla, Sterlite Industries, Jindal Steel & Power, Coal India and Hindustan Unilever also ended notably lower. HDFC Bank lost around 1.5% as higher NPAs hurt sentiment at the counter.
According to the data released by the government on Monday, the annual rate of inflation based on the monthly wholesale price index declined to 7.18% in December 2012 from 7.24% in November 2012. Build up inflation in the financial year so far was 4.72% compared to a build up of 5.22% in the corresponding period of the previous year, the data revealed. The government revised downward WPI inflation for October 2012 to 7.32% from 7.45% reported on 14 November 2012.
Additionally, Inflation based on the combined consumer price index for urban and rural India edged up to 10.56% in December 2012 from 9.9% in November 2012, data released by the Central Statistics Office on 14 January 2013, showed. Within the consumer price index, inflation with respect to food and beverages stood at 13.04% in December 2012.