BSE Sensex soared to touch 3600-point mark on Friday. A 108 points gain over last week. NSE Nifty gained too -- up 36 points. PSU and banking sector stocks rallied throughout the week. Supporting the market mood was brisk FII purchases and positive market news. But smart money was choosy. So, despite gains the turnover fell by 17 per cent over the week.
Foreign institutional investors made a huge purchase of Rs 860 crore this week, the highest weekly net-investment made by them in the last eleven months. But, domestic funds remained skeptical selling Rs 160 crore worth of shares. Another PSU was sold this week, the loss making Paradip Phosphate. The approval of APM dismantling further perked buying interest in PSU oil stocks. Potential PSU sell-off candidate -- HPCL, BPCL, MTNL and Shipping Corporation were the big gainers. ONGC and MTNL gained on hopes of dividend. The average market capitalization of 42 traded PSU stocks surged 21.8 per cent this week. Auto and cement stocks too gained marginally on selective FII buying.
Banking stocks were rising on expectations of cut in small savings rates and relaxation in foreign holdings in banks. On an average, market capitalization of 12 banking stocks surged by 18 per cent during the week. Dena Bank was the big gainer with a 49 per cent rise. Among private sector banks, ICICI was up 37 per cent.
Tech stocks behaved like old economy this week with 1 percent rise in BSE IT Index. The dampening effect of a weak NASDAQ was predominant throughout the week. However, the bright spark among tech was Mastek, up 16 per cent on institutional buying.
On Wall Street, the technology packed NASDAQ tumbled 0.8 per cent and the broader Dow Jones gained 1.6 per cent during the week.
Two-way fungibility: ADR/GDR Vs Shares - The RBI has finally allowed companies to convert ADR and GDRs into shares and vice versa. This will help reduce the price difference between the company's stock price domestically and overseas and the arbitrage opportunity too.
Market remains cheerful backed by PSU disinvestment, actualised reform milestones and falling bond yields. PSU and banking stocks, hopeful of budget giveaways are likely to rule the market. The cheer prevails anticipating the budget 2002. Good till it lasts…