Positive sentiment prevailed in the stock market for the week ended November 12, 2004. BSE Sensex touched new eight-month and nine-month highs during the week and ended close to the psychological important mark of 6,000 points.
The markets zoomed to new eight-month and nine-month highs on Monday and Wednesday, with the Sensex closing at 5930.47 and 5973.75 points, respectively. It was scheduled to rise as the markets progressed.
For the week, the Sensex closed up 1.23 per cent at 5964.01, while the Nifty gained 1.11 per cent at 1872.95 points. The positive sentiment was reflected in the broader indices also with the S&P CNX 500 gaining 1.06 per cent and the CNX MidCap 500 gaining 2.58 per cent over the week.
The week also witnessed the beginning of the Hindu Samvat Year 2061. The special "mahurat trading session" saw the Sensex breach the 6,000 mark only to settle lower at 5995.48 points.
BSE IT and the FMCG indices saw the maximum rise in the week. The BSE FMCG index rose by 1.50 per cent, while the BSE IT index gained 2.04 per cent. The festive season and hopes that it would improve sales may have triggered interest in the FMCG counters.
Blue Dart also witnessed buying interest in the early part of the week with reports of DHL picking up a stake in the company. The decision of Infosys to go in for a second sponsored ADS provided support to the stock. Ranbaxy's stock lost 2.51 per cent on Monday on reports of Schwarz Pharma discontinuing the phase ii clinical trials of the molecule RBx 2258-Pamirosin (SPM 969), due to unclear pre-clinical findings.
The positive FII inflows lent support to the market sentiment. The cooling oil prices also kept the sentiment high. The rise in oil demand due to the onset of winter may have some effect on prices in the future. Some amount of profit booking had crept in on Thursday when BSE Sensex losing 0.33 per cent to close at 5954.31 points.
Interest rate hike is on cards and is expected to affect the banking sector. HDFC has already raised its home loan rates by 50 basis points. With the festival season coming to an end with Diwali, more banks are expected to join the fray and raise interest rates. The government is said to be considering measures to improve the banking system.
The banking sector may witness some activity with the possibility of rise in the interest rates. The flow of FII money into the country could affect the sentiments going forward. The effect of the festival season on automobile sales and the FMCG companies is also likely to be seen with interest.