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Markets Nudge

The markets moved gently this week. They surged in four out of the fives trading days. Nifty was up 1.47 percent while Sensex rose 1.74 per cent

The rally for the markets continued this week (July31-August4) also. Both the indices, the Nifty and the Sensex, were up 1.47 per cent and 1.74 per cent, respectively. Both the indices ended sessions in the positive zone on four out of the five trading days.

Among the broader indices, S&P CNX 500 gained 1.68 per cent, while the CNX Mid Cap ended the week up by 1.75 per cent.

The sectoral indices also recorded positive returns this week with BSE FMCG (down 1.90 percent) being the only exception. BSE IT Index was the top gainer among the sectoral indices. It surged 3.14 per cent during the week.

FIIs were net buyers purchasing stocks worth Rs 784.8 crore for the week ended August 4 while mutual funds were net sellers of equities worth Rs 12.22 crore.

On Monday (July 31) the Sensex ended at 10,743, up 64 points over Friday, after touching an intraday high of 10,854. The Nifty closed up 12 points at 3,144. There was good buying interest in mid-cap and small-cap stocks. Auto sector shares were the best movers in the market. Auto companies like Maruti and Tata Motors gained 2 per cent while Hero Honda rose around 1 per cent. However Bajaj Auto closed marginally lower. The biggest gainer of the day was Bhel, rising 3.9 per cent while HLL was the top loser of the day shedding 5 per cent. FIIs were the net buyers to the extent of Rs 131 crore on Monday.

On Tuesday (August 1) the markets ended flat. The Sensex closed at 10,752, up 8 points, after touching a low of 10,646 and a high of 10,777. The Nifty ended the day at 3148, up 5 points or 0.15 per cent. There was little cheer in the markets despite higher ratings to India by Fitch. The agency upgraded India's long-term foreign and local currency debt to BBB- from BB+. Bhel gained for the second day consecutively. It rose 2.8 per cent to the end at Rs 2,101. Cement companies also posted smart gains on the back of robust results during the “monsoon quarter”. Banking stocks fell on the news that Punjab National Bank and HDFC Bank had raised their home loan rates. The BSE Bankex fell around 1 per cent on Tuesday.

On Wednesday (August 2) the markets shrugged off rising crude prices. The Sensex ended up 125 points or 1.2 per cent, to 10,877 while Nifty was up 1.1 per cent to settle at 3,182 points. Bhel remained the star stock gaining again, this time 2.4 per cent. Banking stocks were again in the red due to a hike in lending rates to the tune of 0.25-0.5 per cent. The main index movers were NTPC (up 3.8 per cent), Tata Motors and Bajaj Auto, which gained over 2 per cent. FIIs were net sellers, offloading equities worth Rs 46 crore while mutual funds were net sellers to the extent of Rs 100 crore.

For the first time during the week, the Sensex breached the 11,000 mark on Thursday (August3). However profit booking in the late hours took the markets down as they closed with modest gains. According to dealers, some market players avoided long positions, anticipating interest rate hike by the Bank of England. The announcement of the hike came after market hours. Dealers were expecting that UK-based funds may cut exposure to India and redeploy funds in treasury bills back home.

The Sensex finally settled at 10,923 points, up only 47 points while the Nifty rose 8 points to end at 3190. It may be mentioned that at one point of time the Sensex had gained 206 points but the profit booking pared all the gains it made. Ranbaxy was top performer of the day gaining some 4 per cent. The surge came after the news that the pharma major had won a patent case against Pfizer for the atorvastatin drug. The counter closed at Rs 392.

Friday (August 4) was the only day when rally in the markets took a break. The Sensex lost 56 points to end at 10,866, while the Nifty closed at 3,176, down 14 points. The banking stocks were the worst hit. The banking index was down 1.5 per cent. SBI shed 2.7 per cent to Rs 808 while stocks of other major public sector banks like Allahabad Bank, Bank of India, Canara Bank, Indian Overseas Bank, Oriental Bank of Commerce, Punjab National Bank lost 2 to 4 per cent. The sell-off was sparked by the finance minister's statement that banks need to take the government permission before effecting a loan rate hike. Apart from public sector banks, other major counters which registered losses were Cipla, Reliance Industries and ITC, all shedding around 2 per cent. There are still concerns about the indefinite strike on August 29 by the employees of public sector oil companies who are demanding a hike in wages.