As stock markets bled globally, the Indian shares made some recovery this week. While the BSE Sensex was up 0.90 per cent up, the S&P CNX Nifty gained 1.5 per cent over the week. In comparison, the Nasdaq was down 2.91 per cent and the Dow lost 2.35 per cent.
In spite of the Nasdaq's losses domestic IT shares ended the week on a stronger note – the BSE IT index gained 3.25 per cent. While IT shares started the week on a strong note they lost ground later on. US Secretary of State Collin Powell's presentation to the UN Security Council reaffirmed his government's determination to go to war. This reaffirmation saw IT shares loose some ground. This was however, more than compensated for by heavy FII buying in index heavyweights on the penultimate trading day. At the end of the week Infosys and Wipro were up 4.16 per cent and 2.83 per cent respectively. Satyam in contrast lost 0.5 per cent.
Banking stocks continued to witness strong growth in volumes. Speculation that FII limit in PSU banks would be increased added to the news flows surrounding these stocks. SBI was a major gainer ending the week up 6.8 per cent. Another finance stock in the limelight was Kotak Mahindra Finance. News that the company has obtained a license to operate as a bank, saw the scrip move up by up 18 per cent for the week. However, news that there was no move to hike the FII stake, brought this rally to a halt.
Auto stocks too rallied on account of encouraging sales figure for January. Ashok Leyland and Telco were top gainers on Thursday. On the whole these stocks rose by 9.7 and 6.4 per cent respectively over the course of the week.
This week, FIIs pumped in Rs 440 crore – two-and-a-half times that of previous week's inflow. In fact this amounted to half of last months inflows. Mutual Funds also turned buyers after four weeks. They bought equities worth Rs 21 crore this week.
Outlook
The US is all set to go to war with Iraq, with or without the UN support. This obviously reduces the possibility of a further recovery. Stock markets may also witness volatility with the Budget round the corner.
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