What a week it was. The BSE Sensex crosses the 5,000-point level and the S&P CNX Nifty broke the 1,600-mark. But the stock market bulls who were initially all praise for Dr. Y. V. Reddy's maiden monetary policy retraced from the buying counters later in the week. Both BSE Sensex and Nifty closed the week with a mere 1.32 per cent and 2.32 per cent gain respectively. While the combined average trading volumes rose 23 per cent over the previous week, combined trading volumes touched a high of Rs 10,000 crore on Tuesday.
Despite the fall in key indices, there were two gainers for every one loser on the BSE indicated that non-index stocks also attracted buyers. Thus, while on Monday, the S&P CNX 500 and CNX Mid Cap Index didn't trace the spurt in large-cap indices, by Thursday, they were up 3.40 per cent and 3.48 per cent respectively.
The pace of FII purchases increased this week, as they bought equities worth Rs 1,649 crore (till Thursday). Domestic mutual funds were conspicuous by their absence as they were net sellers to the tune of Rs 84 crore.
The week indeed started with a bang, as the key large-cap indices--Sensex and Nifty gained a smart 3.18 per cent and 2.94 per cent respectively on Monday. The upward revision in the GDP forecast gave a big boost. Technology stocks led the pack, as the BSE IT Index soared 5.18 per cent over a single trading session. FMCG and pharma stocks were the next big winners of Monday, while banking stocks remained stagnant.
However, after reaching the landmark level, the broad large-cap indices seemed to hold back the gain—as the Sensex and Nifty moved slowly and witnessed profit booking towards the end of the week. Mid-caps attracted attention this week. The prominent gainers among mid-cap stocks were -- iGate Global Solutions, Gujarat Mineral Development, Ahmedabad Electricity and Apollo Tyres.
In the large-cap segment, pharma and technology stocks stole the show. The BSE Healthcare Index, driven primarily by a rise in Dr Reddy's, gained 4.54 per cent over the week. The pharma major has become the first company to get approval for marketing a speciality branded drug in the US. The stock went through the roof–rising 18 per cent till Tuesday, but gave back the gains towards the end, thereby rising just 6.34 per cent over the week. The BSE IT Index which was up 8.42 per cent till Thursday, lost ground over the last trading session. It closed the week with a gain of 6 per cent. However, banking stocks were the losers over the week as the Bankex lost 2.75 per cent.
Outlook
The Sensex reached the 4,000-point level over 68 trading sessions since May 2003, and the 5,000 level was reached over 58 trading sessions since August 2003. With results season out of the way, the markets will search for fresh triggers in the coming weeks.
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