This week was better than last week, with equity markets making a partial recovery over previous week's losses. Both the BSE Sensex and the Nifty gained 1.7 per cent each over the week. At the start of the week though the indices fell, they recovered on expectations that the US-Iraq war would end soon. The trend was similar in the US markets too as US forces moved closer to capturing Baghdad. The Nasdaq and the Dow Jones gained 1 per cent 1.6 per cent, respectively.
While the recovery in the S&P Mid-cap Index was much sharper (up 4.1 per cent), the S&P 500 moved up 2.2 per cent this week. The BSE IT Index, after losing heavily on the first trading day, made gains in the remaining sessions. Over the week though the index was up marginally (0.4 per cent).
Among sectoral indices, the BSE PSU Index was the best performer, gaining 3.4 per cent. PSU banks such as Punjab National Bank, Oriental Bank of Commerce and Corporation Bank witnessed buying interest, posting handsome gains for the week. Petroleum stocks—HPCL and BPCL—gained significantly while ONGC didn't make much headway.
The BSE FMCG Index, on the other hand, remained nearly flat. Hindustan Lever touched its 10-year low of Rs 145.9, though it managed to gain 1.9 per cent over the week. The FMCG major's growth over the past few quarters has not been very impressive and the stock came under selling pressure early this week. The BSE Healthcare Index ended the week up 2.1 per cent.
As for stocks that made news this week, Bharti Tele gained 14 per cent for the week on expectations of impressive Q-4 result. Moser Baer scrip gained 7 per cent over the week in the wake of a possible rise in the price of compact disks. Among institutional players, FIIs bought equities worth Rs 260 crore for the week, while mutual funds had offloaded equities worth Rs 42 crore by Thursday.
In a significant development, the trading cycle in equity markets moved from T+3-day cycle to T+2 days, w.e.f April 1, 2003. This is a step closer to the T+1 settlement cycle. Simultaneously, the RBI introduced SEFT (Special Electronic Funds Transfer) scheme from April 1, 2003. This will facilitate a safe and quick transfer of funds in bank branches (in 500 cities) across India. Meanwhile, SEBI also introduced three-stage circuit breakers for this quarter as another risk control measure. This will help in coordinated trading halt in equity and derivative markets.
Outlook
Equity markets are likely to take cue from Q-4 results, which will start to trickle in now. Also, the spread of severe acute respiratory syndrome (SARS) across Southeast Asia, which has hit global businesses, could impact Indian markets as well. A quick end of the war in Iraq though could change the face of things.
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