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This Week in Stocks

Old economy stocks were the major gainers last week, while tech stocks played a supportive role. In a week without any major news, the market gets ready for the first half results.

This week too, stock markets sustained their bullish bias. As on Friday, the BSE Sensex gained 1.79 per cent while the Nifty gained 2.54 per cent. The broad-based S&P CNX 500 gained 2.42 per cent, indicating that most stocks are participating in the rally. Mid-cap stocks came back in the limelight this week with the CNX Midcap 200 rising 2.73 per cent, higher than the other three indices.

The stock markets were open for a special trading session on Saturday as the NSE wanted to test its back-up systems. Volumes were low on Saturday and the Sensex closed marginally lower compared to the close on Friday.

If it was the tech, pharma and FMCG industries that saw action so far, this week it was the turn of the old economy. ONGC, Reliance, Tata Steel, cement companies etc were the big gainers this week. Even mid-caps sizzled once again. Among the major news of the week was the NTPC IPO, which was oversubscribed 40 times on the first day of opening. On Friday, the Finance Minister said that the distinction between foreign institutional investment and foreign direct investment might not be relevant. Oil crossed $53 on Thursday.

In sectoral indices, the BSE PSU Index gained 2.55 per cent. ONGC has a large weightage in the index and this stock has appreciated over 3 per cent in the week. Even other old economy PSUs did well. The BSE Bankex gained 2.15 per cent after a 0.13 per cent fall last week. BSE IT Index gained 2.07 per cent. Good results from tech companies in the coming week have seen investors flocking to tech stocks. TCS crossed the Rs 1100-mark, which was only breached on the listing day. There was little interest in FMCG stocks and the BSE FMCG Index languished at about the same levels, rising 0.17 per cent during the week. Pharma stocks bucked the bullish trend and declined 1 per cent. This sector has seen a lot appreciation in the past few weeks and the sector seems to be taking a breather.

The combined daily average turnover on BSE and NSE rose by 5 per cent to Rs 6436 crore. FII inflows rose by Rs 1,113.9 crore, the eighth consecutive week with positive flows. While FIIs continue to invest, mutual funds are increasingly withdrawing investments with a net outflow of Rs 252 crore last week.

Outlook
All eyes will be on the September numbers of the tech companies, which will come next week. The future direction of the market will depend on how the results are and whether they satisfy the markets. The markets may pause for a breather this week considering that they have run up quite quickly. Investors will need to keep an eye on results this week. Some mid-caps will continue to outperform the markets.