VR Logo

Markets Celebrate Monsoon

Robust FII inflows, fall in international crude oil prices and good monsoon cheered equity markets in the week ended July 1, 2005

Robust FII inflows, fall in international crude oil prices and good monsoon cheered equity markets in the week ended July 1, 2005. Though frequent bouts of profit booking after previous week's historic gain slowed down the progress, the Sensex breached the psychologically important barrier of 7,200 mark to end at an all-time high level of 7,210.77, up 0.87 per cent over the week. The 50-share Nifty too closed up 0.80 per cent.

Among the broader indices, the S&P CNX 500 rose 0.58 per cent, while the CNX Midcap 200 closed up 0.18 per cent.

Equity markets started the week on a flat note on Monday. Volatility ruled the day as the equity markets failed to maintain the previous week's momentum. Profit booking in Reliance pack shares pulled the Sensex down during the closing hours. FMCG stocks had a good day. The party ended on Tuesday. On back of profit booking, the 30-stock BSE Sensex plunged 102.08 points to close at 7,049 mark. The Nifty showed similar trend and skidded nearly 30 points to 2169.85 points. Weakness in index heavyweights, auto, metals and technology stocks led the slide. The major Sensex losers include TISCO, Gujarat Ambuja Cements and Tata Motors.

The equity markets staged a strong comeback on Wednesday. Helped by a broad-based rally mainly in metal, sugar, pharma, FMCG, technology and oil stocks, the 30-stock BSE Sensex gained 71 points to close at 7119.88 mark. The Nifty too jumped 22 points to end the day at 2191.65. Index heavyweights, including ONGC (up 1.6 per cent) and Reliance Industries (up 2.07 per cent), provided strength to the index. Select auto scrips also raced ahead.

Markets extended gains on Thursday. The 30-stock BSE Sensex touched an intra-day high of 7,218 points before settling up 74 points at 7193.85. The Nifty too rose 29 points to finally end the day at 2220.60 mark. The rally was led by technology, banking and FMCG stocks. PSU stocks too provided some strength. Wipro, which traded weak in the morning session on news of Vivek Paul leaving as vice-chairman, staged a comeback and rose 1.5 per cent.

Equity markets signed off the week with marginal gains on Friday. BSE Sensex ended at 7,211, up 17 points from its previous close. However, in the broader markets, NSE Nifty lost 8 points to end at 2,212. A steep fall in the index heavyweight ONGC dragged the Nifty into red. Mid-cap counters surged, as the CNX Midcap 200 gained 1.4 per cent. Sectors like auto, FMCG, pharma and cement posted gains. Auto stocks rallied as the manufacturers came out with sales numbers. Among others, Adlabs surged 16.6 per cent, after Reliance Capital announced its plans to buy 51 per cent stake in the company. ONGC led the pack of losers, slipping 3.7 per cent. Tech majors Wipro, Infosys and Satyam also ended in red.

Among the Sensex constituents, HDFC Bank led the pack of gainers with 6.50 per cent gain after a huge block deal, closely followed by 5.31 per cent rise in Bajaj Auto.

Among the sectoral indices, the BSE FMCG index continued its good show and surged 2.89 per cent on back of a good monsoon. Banking stocks too surged and helped the BSE Bankex rise 2.17 per cent.

Metal stocks suffered over the week on fears that they would slash prices. The BSE Metal index skidded 4.24 per cent.

The combined daily average turnover on both exchanges went up by a marginal 0.12 per cent to Rs 9,103 crore.

Foreign institutional investors were in action throughout the week--they invested Rs 2,277 crore. Mutual funds, though, sold stocks worth Rs 432 crore.

Outlook

With the markets at an all-time high, we may see frequent bouts of profit booking in days to come. This may turn the markets volatile. However, with FII money still pouring in, the rally may move ahead. So far, domestic mutual funds have resorted to heavy selling. It would be interesting to see how long they continue to do so. Good monsoon is another plus that could boost the sentiments.