This was certainly a week to remember.
The Sensex closed lower on Monday (8160). Among the Sensex stocks, only 3 stocks ended in the green – HDFC, Maruti and M&M. ITC, Reliance Industries, SBI, Infosys, L&T and Bharti were among the major laggards.
On Tuesday and Wednesday, we missed the global rally, as the world’s major stock markets rebounded from recent reversals. We were celebrating Id and Holi and, of course, India’s victory in New Zealand.
But we caught up with the global sentiment on Thursday (8343) when only 5 Sensex stocks ended in the red. On Friday, the Sensex soared to close at 8756, its highest gain in 2009. This was also due to the FIIs turning buyers after consistent selling for over a month. All BSE sectoral indices were also up.
This week's gains globally were driven by news that Citigroup, Bank of America and JP Morgan were all profitable in the first two months of this calendar year. Naturally, optimism was high that ailing U.S. banks are on the mend. On Friday, oil fell towards $46/barrel as bearish forecasts showed oil demand contracting faster than expected. Indeed, a far cry since it quoted at over $147/barrel in July 2008.
Domestically, the inflation numbers were good. Inflation fell to its lowest level in six-and-a-half years in the last week of February which stood at 2.43% for the week ended February 28 compared to 3.03% in the previous week.
India’s industrial production fell for the third time in four months. Output at factories, utilities and mines dropped 0.5% in January from a year earlier. However, the IIP figures had a minimal impact on sentiment.
