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Bulls set to party

Though the week was ruled by volatility and uncertainty, it finally closed with impressive gains.

The market ended the week with hefty gains. Though it was trading positively most of the day, it surged in the final hour. The Sensex crossed its 17,000 mark and Nifty went above 5,100.

This was specially good when viewed in the backdrop of Thursday, the F&O expiry. The April series saw a slightly reduced rollover vis-a-vis the average of the past three months. Also, the premium in the May Nifty futures decreased.

Despite a good Monday and a "not-so-bad" Tuesday, the bulls retreated on Wednesday. On Thursday, the Sensex and Nifty closed flat, the former in positive and the latter in negative territory. The bulls made a strong come back in the opening trades mirroring gains in the global market. But as Thursday progressed, key indices turned volatile and got choppy.

IT stocks had a volatile week and were hammered on Tuesday. Project delays, U.S. credit crisis and the rupee appreciation proved to be strong headwinds to the sector. But on Thursday, tech stocks were riding high again and continued to do well on Friday. Banking stocks too did well on Friday, after a bad Wednesday.

Important events that impacted the market

On Monday, retail and institutional investors were allowed to short sell. But, no institutional investor would be allowed to do day trading. And, it was made mandatory for institutional investors to pay margins in the cash market. The margining of institutional trades was expected to result in a dip in volumes.

Corporate results play a crucial in determining the direction of the market.

This week, FIIs turned into net buyers for six days in a row for the first time in 2008. This promptly led to speculation that the worst was over. But by Wednesday, they turned into net sellers.

Thursday was the F&O expiry.

On a macro front, untamed inflation was a concern. The inflation numbers declared on Friday were high but in line with market expectations.

Market reports during the week:
Uncertainty in the Market
Volatile Market