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Festivities Continue

Ample liquidity, robust FII inflows, matching support from domestic mutual funds and SEBI directive allowing mutual funds to participate in derivatives trading lift markets

Ample liquidity, robust FII inflows, matching support from domestic mutual funds and finally SEBI directive allowing mutual funds to participate in derivatives trading helped equity markets race ahead in the week ended September 16, 2005. After breaching the psychologically important landmark of 8,000 in the previous week, the 30-stock BSE Sensex gained 321 points over the week to close at 8,380.96. The Nifty too added 3.95 per cent to end the week at 2,552.35 mark. Among the broader indices, the S&P CNX 500 gained 3.63 per cent, while CNX Midcap rose 2.70 per cent.

Equity markets had an auspicious start on Monday. A rally was seen across the markets. At the end of an eventful day, the Sensex closed up 78.41 points at 8,138.42. The Nifty ended the day up 28.70 points at 2,484.15. The rally was led by FMCG, banking and PSU stocks. IT and healthcare stocks too saw considerable buying interest. Mid-caps were in the limelight with the CNX Midcap surging 1.22 per cent on Monday.

Equity markets continued their upward march on Tuesday as well. However, volatility ruled the markets throughout the day. After slipping to a level of 8,121 points, the Sensex staged a comeback to close at 8,193.96 mark, up 55.54 points over the day. The Nifty too added 16.20 points to close at 2,500.35 mark. Mid-cap stocks continued their dream run and closed up 0.64 per cent.

After a volatile session, equity markets ended flat on Wednesday. The Sensex touched an intra-day high of 8,260, before closing at 8,189, down four points. In the broader markets, the Nifty ended the day at 2,492, down six points. Mid-caps, however, remained weak as the CNX Mid-cap Index lost more than half a percent to end at 3,810.70 points. At the sector level, consumer durables posted smart gains. Oil stocks suffered as the BSE Oil and Gas Index shed 37 points.

Indian markets shrugged off Wednesday's weakness to stage a strong comeback on Thursday. Bulls were on a rampage once again, as the 30-scrip BSE Sensex soared 94.28 points to end the day at 8,283.76 mark. The Nifty too gained 31.50 points to close at 2,523.95. Mid-cap stocks zoomed, as the CNX Midcap added 1.11 per cent on Thursday. FMCG scrips led the rally with support from IT and healthcare stocks. Select banking and PSU stocks too saw considerable buying interest.

Equity markets opened weak on Friday but recovered handsomely in the later part of the day to close at a new record high. While the BSE Sensex gained 97.20 points to close at 8,380.96 mark, the Nifty added 28.40 points to end the day at 2,552.35 points. The day was, though, not as lucrative for mid-cap stocks as the CNX Midcap index gained just 0.28 per cent. Among the sectors that saw a lot of activity included PSU and banking. Pharma and FMCG counters too saw considerable buying interest.

The mood was upbeat throughout the week. Among the 30 Sensex constituents, only three stocks (ACC, Cipla and Hero Honda) lost over the week. The pack of gainers was led by HDFC, which rose a whopping 16.20 per cent.

Among the sectoral indices, the charge was led by metal, banking and FMCG stocks. While the BSE Metal rose 5.43 per cent, the BSE Bankex and BSE FMCG added 4.19 and 3.78 per cent, respectively. PSU, IT and select pharma stocks too saw considerable interest.

The combined daily average turnover on both exchanges went up by 14.45 per cent to Rs 10,497 crore.

Foreign institutional investors continued their support to the markets and invested Rs 1,102 crore, while domestic mutual funds pumped in Rs 719 crore over the week.

Outlook
With no signs of a slowdown in the FII inflow, the equity markets' party is likely to continue. However, volatility would rule the week ahead. The second quarter result season is about to start and is likely to influence the way markets move ahead.