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Reliance In Red

In an action-packed week, Sensex touched its 10-month high, even as a few Reliance stocks lost heavily due to the ongoing rift among the Ambani brothers

Reliance investors would like to forget the week ended November 25 as a nightmare. News of the ongoing rift between the Ambani brothers dominated the equity markets and at the receiving end were the Reliance stocks--Reliance Energy lost a massive 11.54 per cent, while Reliance Industries ended the week down 4.48 per cent.

Throughout the week Reliance Energy was in red but the shocker came at the end of the week when six directors resigned from the board of the company. Soon, the stock fell 5.83 per cent to hit its lowest finish in five months. Reliance Industries too ended the week at its lowest finish since September 28, 2004.

Overall, there was a positive sentiment in the markets. The 30-stock BSE Sensex closed up 1.23 per cent at 6035.03 points, while Nifty gained 1.53 per cent in the week mainly on account of high action in the FMCG and pharma stocks and increased participation by the foreign institutional investors (FIIs). Sensex crossed the psychological important 6,000 mark on Tuesday and continued its gain to hit a 10-month high on Wednesday at 6035 points.

After a negative return last week, the BSE FMCG Index added a whopping 6.31 per cent. Cigarette major ITC saw active buying in the week on reports of an eminent cigarette price hike. The stock gained 5.21 per cent on Wednesday itself and followed it up with another 1.7 per cent gain to end the week at Rs 1,275. HLL too attracted investors' attention.

The BSE Healthcare Index too reversed its two-week negative trend to end the week up 2.40 per cent.

FIIs pumped in Rs 1,695 crore, while the combined average daily turnover of BSE and NSE went up by 31 per cent over the week. Mutual Funds continued to be the net sellers for the third consecutive week and booked profits worth Rs 237 crores.

Among the broader indices, S&P CNX 500 gained 1.94 per cent, while CNX Mid Cap 200 continued its good show to add 3.26 per cent.

Energy stocks fell on the government's decision late on Wednesday to abandon plans to raise cooking gas prices by Rs 5 every month and defer move to raise administered prices of natural gas. Cement stocks too lost ground on Thursday after Railways announced a 3.7 per cent increase in freight rates.

Outlook
Volatility is likely to rule the equity markets next week. The unfolding story of rift between the Ambani brothers would be followed closely. Reliance Energy and Reliance Industry, which have over 12 per cent weightage in the Sensex, are likely to set the market mood. However, increasing FIIs participation could keep the markets afloat.