Weekly Wrap: Sensex, Nifty gain over 2.5%

Last Updated: Sun, May 12, 2013 04:58 hrs

Sustained buying by foreign institutional investors, a firm trend in global markets and data showing a surge in industrial production in March lifted sentiment and drove the benchmark indices Sensex and Nifty up by over 2.5% last week.

While the Sensex ended the week with a gain of 507 points or 2.6% at 20,083, a 14-week high, the Nifty hit its best levels in more than two years, closing at 6095 gaining 151 points or 2.5%.

With midcap and smallcap stocks too surging higher on strong buying support, the BSE Midcap and Smallcap indices moved up by around 2.3%.

Gains were not any significantly sharp on Monday, but were fairly solid nevertheless. Select blue chips, led by heavyweight Reliance Industries moved higher that day, lifting the BSE barometer up by almost 100 points.

The Sensex spurted 215 points or more than a percent hit a three and a half month closing high on Tuesday, as stocks rose on positive cues from global markets. Stocks extended their gains to a third session on Wednesday, thanks to a firm trend in global markets. The Sensex ended up 101 points.

Weak global markets prompted investors to indulge in some profit taking on Thursday, but stocks bounced back smartly on the final session, buoyed by better than expected March industrial production data and a rally in global markets. After losing around 50 points on Thursday, the Sensex jumped nearly 150 points on Friday, hitting its best level since 28 January 2013.

FMCG heavyweight, which hit a new high last week, ended stronger by 6.7%. Hindustan Unilever too ended on a firm note, gaining about 2.2%.

Information technology stocks were back in the reckoning, with some encouraging economic data from the U.S. and strong results from Cognizant Technology Solutions aiding their surge. Tata Consultancy Services (5.3%) and Infosys (2.7%) saw some bright outings during the week. Infosys announced last week that it will collaborate with SAP on developing mobile applications for retail industry.

Automobile majors had a great outing too. Tata Motors, the star performer in the automobile space, ended stronger by over 8%. Maruti Suzuki gained more than 3.5%, aided by the yen's decline against other major currencies. Mahindra & Mahindra ended higher by a little over 1%, while Bajaj Auto and Hero Motocorp gained 2.6% and 5.9%, respectively.

Index heavyweight Reliance Industries, despite seeing some weak spells during the week, ended on the positive side, gaining about 1.5%. Metal stocks Hindalco (8%) and Tata Steel (2.2%) closed on a bright note. Telecom stock Bharti Airtel moved up 2%, PSU power equipment maker BHEL gained over 2.5% and housing finance stock HDFC ended 2.7% up on strong results.

Bank stocks moved higher amid hopes the central bank will resort to another rate cut soon. Sector heavyweights State Bank of India, ICICI Bank and HDFC Bank all ended stronger by over 3%.

Among notable losers, Coal India declined 5.7%, Sun Pharmaceutical Industries ended nearly 5% down and NTPC lost around 2.5% despite a near 69% jump in net profit for the quarter ended 31 March 2013. Jindal Steel & Power ended lower by over 2%.

In economic news, India's industrial production rose 2.5% in March 2013,as compared to a revised 0.46% growth in February 2013. While the manufacturing sector saw a growth of 3.2%, electricity generation was up 3.5% in the month.

Mining sector declined 2.9%, while production of basic goods and capital goods rose 2.6% and 6.9%, respectively. While consumer non-durables production rose 6.5%, the consumer durables goods production saw a decline of 4.5%. For the year ended March 2013, industrial production registered a growth of a mere 1%.

According to the data released on Monday, the services sector growth declined sharply in April. The HSBC Services Purchasing Managers' Index, based on a survey of around 400 companies, fell to 50.7 in April 2013 from 51.4 in March 2013.

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