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Markets Reach Another Milestone

In a week that saw ONGC mishap and natural calamity hitting the business capital Mumbai, the Sensex touched 7,700 before settling at 7,635.42 points on Friday

Shrugging off the worries over ONGC mishap and the natural calamity that hit the business capital Mumbai, the equity markets continued their upward journey in the week ended July 29, 2005. The 30-scrip BSE Sensex scaled a historic high of 7,700 points on Friday before ending the week up 2.86 per cent at 7,635.42. The Nifty too gained 2.06 per cent to close at 2,312.30 mark.

The equity markets rally was primarily led by banking and FMCG stocks. Bank stocks were in the limelight after the RBI decided not to hike the interest rates. Among the broader indices, S&P CNX 500 added 1 per cent, while CNX Midcap 200 lost 0.91 per cent.

Overall, the week saw high action in the equity markets. Helped by rally in the banking and PSU stocks, equity markets crossed yet another milestone on Monday. The 30-stock BSE Sensex closed 82.35 points up at 7,505.60. Earlier in the day, the index had touched an intra-day high of 7,526 points. The Nifty too posted a 1.15 per cent rise to end the day at 2,291.75 points. Among the Sensex constituents, ICICI Bank, NTPC and HDFC Bank saw a lot of buying interest. ONGC, which signed an agreement with Mittal Steel, ended the day up 2.8 per cent.

Equity markets witnessed high volatility on Tuesday. After wild swings in the range of about 90 points, the Sensex staged a comeback in the post-noon session to close at a historic high of 7,552.77, up 47.17 points. The Nifty too inched 11.40 points up to close at 2,303.15 mark. RBI's decision not to raise the interest rates boosted the markets sentiments. The late recovery was mainly led by banking, FMCG, auto and select pharma stocks. However, oil PSUs, fertilisers, mid-cap technology, media, and engineering stocks suffered during the volatile trading session on Tuesday.

Bulls continued their upward journey on the Dalal Street even as normal life was thrown out of gear in Mumbai on Wednesday. Though sentiments remained subdued during the major part of the day, the Sensex gained 52.26 points to end Wednesday at 7,605.03. The Nifty too added nearly 16 points to end the day at 2,319.10 mark. Banking, IT, auto, oil PSUs, pharma, power and cements stocks attracted buying interest. Encouraging first quarter results of Reliance Industries also improved sentiments in the equity markets.

Markets maintained their momentum on Friday as well. The Sensex touched a historic high of 7,700 during the day before finally settling at 7,635.42, up 0.40 per cent. The Nifty, though, lost 0.29 per cent to end the day at 2,312.30 points. Some big ticket selling towards the end of the day dragged the indices down. Banking stocks continued their surge, while oil and gas and technology stocks lost over the day. The major gainers included State Bank of India, ICICI Bank and Bharti Televentures.

Among the major Sensex gainers over the week, ICICI Bank surged a massive 17.87 per cent, followed by 11.06 per cent rise in the SBI scrips. Dr Reddy's Laboratories too added 8.64 per cent after the company announced that its net profit had doubled in the April-June quarter.

Among the sectoral indices, the BSE IT Index gained a marginal 0.17 per cent. Even as select pharma stocks posted gains, the BSE Healthcare Index slipped in red with losses of 2.28 per cent over the week. The BSE FMCG index recovered last week's losses and surged 2.07 per cent.

Banking stocks were on fire, as the BSE Bankex zoomed a whopping 10.41 per cent.

The combined daily average turnover on both exchanges went up by 7.22 per cent to Rs 9,838.48 crore.

Foreign institutional investors once again showed keen interest in the Indian equities and pumped in a massive Rs 2,347.30 crore over the week. Mutual funds too invested Rs 435 crore.

Outlook

Equity markets have entered an uncharted territory. However, the markets' reaction to the ONGC mishap and the natural disaster in Mumbai suggest that the sentiment is still strong. We might see another positive week ahead.