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Markets End Down

Though Sensex and Nifty ended down on the last trading day of 2006, overall the markets put their May mayhem behind to deliver high returns for the fourth consecutive year

Though the last trading day of the year ended on a weaker note, overall year 2006 delivered 46.7 per cent return for the Sensex, while counterpart Nifty ended the year rising 40 per cent over the year.

The last trading week of 2006 began on December 26 as the markets were closed on December 25 on account of Christmas.

The bears appeared to be suffering from hangovers on Tuesday (December 26) while the bulls continued with the Christmas party. But many doubted the sustainability of this rally since it came on low-trading volume.

On Tuesday, the Sensex closed higher at 13,708.34 while the Nifty at 3,941. Index heavyweights like Wipro, TCS, Tata Motors, SBI and Satyam Computers led the rally. Auto, IT, metal, capital goods and banking stocks rallied.

On Wednesday (December 27), the euphoria continued with volumes increasing. The Sensex closed higher at 13,859.69 and the Nifty at 3,974. The turnover on the BSE was Rs 3,664.48 crore (as against Rs 3,073.48 crore on Tuesday). While on NSE, the turnover was Rs 7,083.45 crore (as against Rs 6,163.81 crore).

Banking, auto, tech and metals stocks continued to rally along with telecom and FMCG stocks. Two pharma stocks that gained were Wockhardt and Dr Reddy's. The former gained on the news that it has launched generic Zofran injection in the US. While Dr Reddy's advanced after the company received the final approval to sell generic Zofran in the US.

Domestic participation was heavy as FII who were net buyers on Tuesday (Rs 8.2 crore) turned out to be net sellers on Wednesday (Rs 152.9 crore). Mutual funds were net buyers on both days to the tune of Rs 336.36 crore and Rs 391.48 crore.

However, much of the gains in the market could be attributed to short covering in the derivative segment ahead of Thursday's expiry.

The bears roused themselves from their slumber on Thursday (December 28). The Sensex dropped to 13,846.34 and the Nifty marginally to 3,971.

Selling pressure was witnessed in frontline stocks like RIL, SBI, ABB, TISCO, BHEL and L&T. Pharma, metal, technology and oil and gas stocks also dipped. Sugar stocks rose. In telecom stocks, Reliance Communication and MTNL gained while VSNL and Bharti Airtel lost.

Turnover rose on account of F&O expiry. On the BSE, it rose to Rs 4,193.06 crore and on the NSE, it rose to Rs 9,966.62 crore.

FIIs were net sellers to the tune of Rs 368.1 crore while mutual funds were net buyers to the tune of Rs 677.1 crore.

The bears continued to dominate on the last trading day of the week and the year (December 20), with the Sensex closing lower at 13,786.91 and the Nifty at 3,966 on Friday. Turnover too dipped on the BSE (Rs 4,015.38 crore) and NSE (Rs 7,556.12 crore).

FIIs were net sellers to the tune of Rs 1,049.7 crore. Though it dipped on Wednesday, the CNX Mid Cap index rallied on Thursday and Friday to finally end the year at 5,017.3.

The biggest Sensex gainers this week were banking stocks (HDFC Bank: 6.38 per cent, ICICI Bank: 3.91 per cent), tech stocks (TCS: 5.84 per cent, Wipro: 5.49 per cent, Satyam: 4.70 per cent). Tata Motors posted a 4.77 per cent gain.

It appears that the FIIs are going to stay on the sidelines for a while. Though the long-term outlook remains strong, the latest quarterly results and the Budget next year should give some direction to the market. There was however, good buying interest in mid caps on Friday.

Whatever the market holds for us in 2007, we wish you a great year!