The bulls faced a lot of pressure on Monday. Weak cues from the international markets, selling pressure in the index heavyweights and yen-carry trade unwinding took its toll as the yen rose to a high against the US dollar. There were more warnings on the US sub-prime crisis. A report released by Standard & Poor said that the chaos in the mortgage markets is only going to get worse in 2008 and will put a dent in US mortgage bank earnings. Next year will be the worst for mortgage bank earnings since the 1990s, the ratings agency stated. But buying in FMCG and select PSU stocks prevented a big slump. BSE Realty, BSE Oil & gas index and BSE IT were the sectoral indices that lost the most.
On Tuesday, the 6-day slide ended. The bulls just needed some good news as a peg and this time, the Left provided it by offering to continue debate on the nuclear deal. US stocks also staged a rally. Asian markets as well as Brazil and Mexico advanced. Among the Sensex stocks, 19 closed positively. All IT stocks (Infosys, Wipro, TCS, Satyam Computers) lost. Capital goods and engineering companies surged.
The momentum continued the next day. On Wednesday, it was a pleasant change to watch Infosys and Wipro advance. Wipro surged on the news that it is chasing orders worth as much as $875 million from Raytheon Co., the world's largest missile Maker. Infosys gained after the company declared that they have planned to acquire smaller competitors in Europe to add customers and expand its consulting business. SBI and state-run banks jumped on the news that they would be receiving fresh capital from the government.
The euphoria changed on Thursday but mid- and small-cap stocks outperformed. Fertilizer stocks rose (Nagarjuna Fertilizer, Deepak Fertilizer, RCF) after the government announced its plans to issue Rs75 billion worth of (fertilizer) bonds. Refinery stocks rallied. Post the sharp run up in the stock price of RPL, the valuation gap between the public sector refining companies (BPCL, HPCL. IOC, MRPL, BRPL and CPCL) had increased considerably. Bongaigaon Refinery sky rocketed by over 30% to close at Rs105, MRPL jumped over 22% to Rs128, BPCL was up 17% to Rs426 and Hindustan Petroleum surged 15% to Rs299.
Friday ended on a sober note. But cement companies did well. State-run refineries BPCL and HPCL rose for four days in a row. Essar Oil ended with a 7-day winning streak.
Some Stocks in the news
ITC was the biggest Sensex gainer this week with a 20.96% jump. Infosys, Satyam, Wipro and TCS lost.
SBI surged on Monday on reports stating that the Cabinet may consider its plan to raise as much as Rs 180 billion by selling shares through a rights offer.
The Jindal Steel scrip attracted a lot of attention this week. There were reports that it intended to split each equity share of Rs 5 into five shares of Re 1 each. Reports also stated that the Indian steel and power producer's planned iron-ore mine in Bolivia may be delayed as opposition senators seek to change legislation that would create a joint venture between the company and government.
RIL announced that they signed a production sharing agreement for deep water offshores in Oman. While it is believe that the shortage of rigs is likely to delay ONGC's development of the company's KG basin block by a year.
REL stated that it had been jointly allocated captive coal blocks in Orissa.
Ranbaxy increased its stake in Zenotech Lab to 34%.
Amongst the sectoral indices, BSE Realty rose throughout the week to close flat on Friday. BSE Auto, BSE FMCG and BSE Oil & Gas rose consistently. BSE IT had a volatile week.
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