The markets opened on a weak note this week and remained cautiously optimistic for the next three days. But by the end of the week the market was beginning to get the heebie-jeebies from the truckers' strike. The other major news for the week was the strong debut by TCS and the softening of global prices of crude oil.
Consequently, the 50-stock Nifty moved up 1.17 per cent while the 30-stock Sensex ended the week 1.03 per cent higher. However, the major movements during the week were noticed in the broad indices, which performed better than the benchmark indices. The S&P CNX 500 gained 1.86 per cent during the week while the mid-caps once again turned out to be the star performers, with CNX Midcap 200 rising a stunning 2.77 per cent in the same period.
IT stocks were in the limelight because of the TCS debut, but somehow remained range-bound. As a result, the BSE IT Index underperformed all other major sectoral indices gaining only 1 per cent during the week. The TCS stock witnessed hectic trading activity following its listing at a huge premium to the offer price and traders deciding to book this premium. The BSE Healthcare Index, in turn, gained 1.61 per cent with mid-cap pharma stocks generating good buying interest. Select FMCG stocks generated good buying interest too. The transporters' strike was turning out to be another worrying factor for the sector but with the strike being called off on Saturday, the looming danger can be warded off. On the whole, the BSE FMCG Index gained 1.89 per cent during the week.
With the softening in crude prices witnessed throughout the week, expectedly the oil stocks zoomed ahead and with them catapulted the BSE PSU index by 3.35 per cent. The softening of global prices of crude together with the slash in excise and custom duties announced the previous week will definitely improve the margins of the oil PSUs. Moreover, talks of consolidation or merger in this sector, have further stimulated buying interest in the oil stocks. The BSE Bankex, though, underperformed most of the other sectors and closed 1.39 per cent higher during the week. However, Thursday turned out to be a good day for the banking stocks as the index registered a gain of nearly 2 per cent.
The combined average turnover on both BSE and NSE showed an uptrend, increasing by 7.4 per cent, but this can largely be attributed to TCS's debut on the bourses and the heavy premium-booking that ensued on Wednesday and Thursday. Volumes on Wednesday and Thursday were on an average 28.9 per cent higher than those on the other three days.
FIIs were net buyers again during the week and increased their net exposure by Rs 320.3 crore during the week. Interestingly, the FIIs have been following a contrarian strategy for quite some time now. This week they were net buyers on Monday and Friday when the markets fell and net sellers on the other days when the markets moved up. Mutual funds, though, were net sellers in the week till Thursday, reducing their equity exposure by Rs 6.55 crore.
After last week's hectic buying spree in US markets, it was "cooling off" time for them this week. The NASDAQ closed 1.31 per cent higher for the week while the Dow Jones moved up 0.84 per cent.
The truckers' strike was turning out to be a thorny issue. If the impasse had prolonged, it could have led to rising inflation as well as production delays for lack of sufficient supply of raw materials. However, with the solution having been struck, hopefully things should get back to normal in a few days.
Movements could be expected in the depressed cement, auto and FMCG stocks. If the softening of all prices continues, petroleum stocks should generate further buying interest. The good news is that, as things stand now, there are few prohibiting factors for the economy and the stock markets could respond with a rally.