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FIIs Fuel Rally

Robust FII inflows ensured continuance of equity markets rally in the week ended January 6, 2006. The Sensex gained 2.58 per cent over the week to close at 9,640 points

Robust FII inflows ensured continuance of equity markets rally in the week ended January 6, 2006. The Sensex gained 2.58 per cent over the week to close at 9,640 points, while the Nifty added 2.73 per cent to 2,914 levels. Among the broader indices, the S&P CNX 500 added 3.18 per cent. Mid-cap stocks started the new year on a high with the CNX Midcap gaining 4.29 per cent over the week.

Markets had a flat start to the new year. After a positive beginning, equity markets pared gains towards the end of the day to close flat. The 30-stock BSE Sensex opened firm at 9,422.49 levels and soon touched an all-time high of 9,456.13 points. Volatile trading followed but the index held on to its gains till the late afternoon session. However, it dipped later on to touch an intra-day low of 9,367.53 points. The index made up for the lost ground towards the end of the day to close at 9,390.14, down 7.79 points. The Nifty ended the day down a marginal 0.02 per cent at 2,835.95 levels. Mid-cap stocks bucked the trend, with the CNX Midcap index gaining 0.65 per cent over the day.

Across the board buying interest triggered a rally in the equity markets on Tuesday. The Sensex opened on a positive note and maintained the momentum throughout the day. It moved in the range of 9,390.79 - 9,546.78 levels to close at an all-time high of 9,539.37 levels, up 149 points over the day. In the broader markets, the S&P CNX Nifty closed at 2,883, up 1.67 per cent. Leading the charge on the Sensex were healthcare and FMCG stocks. Mid-cap stocks too attracted considerable interest with the CNX Midcap index gaining 1.48 per cent over the day.

Equity markets saw yet another surge on Wednesday. The 30-stock BSE Sensex opened weak at 9,523.29 points but soon gathered momentum to touch yet another high. The index moved in the range of 9,523.29 - 9,664.72 levels before finally settling at 9,647.58 points, up 108.21 points over the day. The Nifty too added 0.73 per cent to end at 2,904.40 levels. Among the Sensex constituents, banking and IT stocks led the rally. Mid-cap stocks too had a decent outing with the CNX Midcap index gaining 0.74 per cent over the day. FIIs invested over Rs 466 crore to propel the rally.

Equity markets saw volatile trading on Thursday. The 30-stock BSE Sensex opened weak but shot up sharply to touch an intra-day high of 9,679.34 levels. However, it lost the momentum soon and dipped to a low of 9,571.31 levels in the first half itself. It recovered marginally through the day to close at 9,617.74, down 30.34 points. The Nifty dipped 0.2 per cent to end the day at 2,899 levels. Among the Sensex constituents, IT and FMCG stocks led the slide. Mid-cap stocks had a positive outing with the CNX Midcap index gaining 0.71 per cent over the day.

The trend of volatile trading sessions continued on Friday as well. The 30-stock BSE Sensex opened in the positive territory and traded in the green for the first half of the day to touch an intra-day high of 9,680.92 levels. However, it lost the momentum in the second half and dipped to a low of 9,535.66 levels. The index, though, recovered some ground to end the day up 22.55 points at 9,640.29 levels. The Nifty gained 0.5 per cent to end the day at 2,914 levels. Mid-cap stocks once again fared better than large-caps, with the CNX Midcap index rising 0.64 per cent over the day.

Among the 30 Sensex constituents, 26 stocks ended the week in the green. The pack of gainers was led by 9.55 per cent spurt in the Gujarat Ambuja Cements. HLL dipped 2.05 per cent.

Among the sectoral indices, BSE Bankex (up 4.91 per cent) and BSE Metal (up 4.39 per cent) were the top beneficiaries of the week's rally.

The combined daily average turnover on both exchanges went up by 10.85 per cent to Rs 10,419 crore in the week ended January 6, 2006. The FIIs invested nearly Rs 2,470 crore. Domestic mutual funds turned net sellers and pulled out Rs 344 crore over the week.

Outlook
It's pouring money in the equity markets. The over Rs 2,400 crore flow of funds from FIIs supported the rally this time. The flow of money is unlikely to trip. The forthcoming result season and build up to the Budget would determine the long-term direction of the market from here onwards.