History was made as for the first time last week with the BSE Sensex closing above the 6000-point mark. At the close of play, the bellwether index stood at 6026.59 points, a gain of 5.74 per cent over the week. The last time markets touched the 6000-point mark was in an intra-day trade in February 2000. The S&P CNX Nifty closed at 1946.05 with a gain of 5.93 per cent.
The rally was broad-based with the S&P CNX 500 gaining 7.55 per cent. Mid-caps had a relatively slower week, with the CNX Midcap 200 gaining 4.04 per cent. FIIs continued to buy Indian equities, recording net inflows of Rs 1,170 crore. Mutual funds were also net buyers generating inflows to the tune of Rs 323 crore by Thursday.
Average daily trading volumes rose by 10 per cent over the previous week. A combined turnover of Rs 8,086 crore was the highest in the past seven weeks. The week ended with advances leading declines 2:1 on the NSE. Except for Tuesday and Wednesday, advancing issues outnumbered declining ones on all trading days.
The GDP growth of 8.4 per cent during the second quarter of 2003, as compared to 5.2 per cent in the previous year boosted sentiment. All sectoral indices ended the week in positive territory.
The biggest gainers of the week were PSU stocks. The BSE PSU Index was up an astounding 13.76 per cent. ONGC and IOC gained 24.7 and 15.4 per cent respectively on the news that the government had appointed merchant bankers to manage the proposed public offer of the former. Gas majors GAIL and Indraprastha Gas also had a strong showing shooting up by 26 and 24 per cent respectively.
Bank stocks were also in the thick of action with the BSE Bankex gaining 6.61 per cent. Expectations of good quarterly results and the possibility of an increase in the FII holding limit of SBI gave a boost to most bank stocks. SBI gained 8.57 per cent while ICICI Bank was up 7.48 per cent.
FMCG and IT stocks moved up in nearly equal measure with the BSE FMCG Index gaining 4.88 per cent while the BSE IT Index rising 4.43 per cent. HLL and ITC were up 6.39 and 4.84 per cent respectively. On the IT counters, Infosys and Satyam gained 5.22 and 4.8 per cent respectively.
Indian markets have now entered uncharted territory. The P/E ratio for the main indices is still lower than it was in the past. Quarterly results, beginning with Infosys on January 9, will give direction to the markets. FII inflows will, as always, remain critical. News on the possibility of early elections could be the wildcard.