It was another week of small gain the market. The BSE Sensex gained 53 points (1.7%) and the NSE Nifty was up 16 points (1.6%). Technology stocks were the drivers of gain this week and increased FII participation. The good news was the economic releases of a robust 9% growth in core sector in the quarter (Apr-Jun). And a cheerful NASDAQ till Thursday also brought boosted interest in interest in technology stocks. However, speculation of additional surcharge of levy by government for a weak monsoon dampened sentiments.
The return of FIIs was the most encouraging factors. This week, net FII investment was Rs 188 crore against net-sale of Rs 9 lakh last week. However, domestic mutual funds turned net-sellers offloading Rs 94 crore worth of stocks. In 2002, domestic funds have been persistent sellers, selling stocks worth Rs. 2480 crore till date. Whereas, FIIs figures are a contrast, with net-purchase worth Rs 2856 crore. Though a plus, but it still accounts for only 20% of total investment in the corresponding period last year. Investors were also back this week boosting the combined turnover by 43% at both the exchanges.
With technology gaining attention, the BSE IT Index gained 7.5% this week. The 4.4% gain in NASDAQ by Thursday but lost 3% on Friday, with new investigations of corporate accounting scandal. This was third consecutive week when technology stocks were up. And the mid- and small-cap software stocks have gained more than the large names. For instance, in August, Mphasis BFL and Hexaware Technology gained by over 26%, against 16% rise in Infosys while Satyam Computers is up only 6%.
Among old economy stocks, Reliance Industries gained 2.71% this week, where as HLL was down 1.37% and ITC lost 2%. Meanwhile, the Reliance open offer to buy 20% stake in IPCL at Rs 231, at a hefty premium to its market price evoked a near total response.
Cement stocks surged, after the government data showed that the sector grew 23% in the quarter, the highest among the six core sectors. L&T gained the most (5.17%) followed by ACC, which was up 2.7% over the week. However, all auto stocks fell on account of profit booking. Hero Honda was the worst suffer with a 9.2% fall in its share price. Auto stocks have gained tremendously in last few weeks following the better earnings and sales registered by these companies recently. However, the BSE Healthcare and FMCG Indices ended the week flat.
Outlook
Market's though up, remains fragile and range bound. Its likely to remain adrift in the absence of a trigger.
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