Completely shrugging off the Reliance imbroglio, equity markets scaled their all-time high in the week ended December 3. Fueled by a rally in PSU and banking stocks and strong support from foreign institutional investors (FIIs), the 30-stock BSE Sensex zoomed to its all time high at 6328.43 points, while the Nifty touched 2,000 points for the first time in 11 months to end at 1999 points on Thursday.
At the end of the week, the Sensex was up 4.77 per cent at 6322.80 points, while the Nifty gained 5.01 per cent to 1996.20 points. Among the sectoral indices, BSE Bankex climbed 9.77 per cent, BSE PSU Index closed up 7.72 per cent, while BSE Healthcare and BSE FMCG Index ended the week up 2.80 and 2.90 per cent respectively.
Thursday's historic rally was, in fact, led by high action in the banking and PSU stocks. There was renewed interest in banking stocks with hopes of growth in retail credit like home loans and auto loans. State Bank of India jumped 7.60 per cent to Rs 581.70 on Thursday and closed the week up 12.58 per cent. ICICI Bank and Union Bank of India too added 10.52 and 13.47 per cent, respectively.
PSU stocks also made smart moves with HPCL climbing 7.95 per cent to close at Rs 370 on Thursday. Over the week, the stock gained a massive 10.98 per cent. Maruti Udyog stocks added 9.38 per cent.
Technology counters, however, could not take advantage of the bull run, with the BSE IT Index ending the week up only 0.94 per cent over the week. While software major Infosys registered a marginal gain of 0.93 per cent, Satyam shed 2.88 per cent. Wipro added 1.74 per cent.
Under hammer last week due to the ongoing differences between the Ambani brothers, Reliance stocks recovered with both Reliance Entergy and Reliance Industry gaining 5.85 and 7.90 per cent, respectively. Last week, the two stocks had shed 11.54 and 4.48 per cent, respectively.
FIIs too were in high action. They pumped in Rs 3231 crore, highest since the week ended April 2, 2004, when they had invested over Rs 6,100 crore. The combined average daily turnover of BSE and NSE went up by 26 per cent over the week.
Domestic mutual funds continued their selling spree for the fourth consecutive week and booked profits worth Rs 378 crore.
Among the broader indices, S&P CNX 500 gained 4.67 per cent, while CNX Mid Cap 200 ended flat up only 0.71 per cent.
Outlook
News of stocks scaling new peaks and action in the markets sound great but they also pose a threat. Don't let the rush of blood overpower you. Making investments only because the Sensex has breached a new high and expecting it to continue going up could land investors in trouble. Caution should be the watchword here. With such gains, the stock markets could well pause to take a breather.
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