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Volatility Rules

Despite good quarterly results and RBI policy meetings out of the way, and FIIs on a buying spree, the markets were far from smooth

The week started off well with the Sensex and Nifty closing higher at 14, 515.90 and 4,215.35, respectively. Power, telecom, banking and capital goods stocks recorded gains.

According to a Wall Street Journal report, metal trading hedge fund Red Kite's $1-billion fund lost 20 per cent in the year to January 24. This resulted in a fall in metal prices on the LME and subsequently, India too was hit. Sterlite industries, Hindalco, SAIL and Nalco all lost.

Tuesday turned out to be a mixed bag. The Sensex slipped to close at 14, 478.19 and the Nifty to 4,195.90. Unlike the two major indices, the BSE Mid-Cap closed in the green and select mid-cap stocks like Sesa Goa, Moser Baer and Mphasis BFL did well. Sugar stocks and pharma stocks too did well. But FMCG, oil & gas and telecom stocks were on the receiving end. The turnover of Rs 6,103.31 crore (BSE) and Rs 9,840.60 crore (NSE) was higher than Monday's Rs 4, 722.14 crore (BSE) and Rs 9,185.62 crore (NSE).

Wednesday turned out to be good for the bulls as the market reacted positively to the government's GDP growth estimate of 9.2 per cent for the current fiscal year. The Sensex and Nifty closed higher at 14,643.13 and 4,224.25. Index heavyweights like Infosys, ICICI Bank and ACC surged ahead and the auto, bank, metal and technology indices also moved ahead. Hindalco, SAIL, Sterlite Industries and Nalco all rose after Monday's beating. Turnover dropped on the BSE to Rs 5,361 crore but rose on the NSE to Rs 10,333.92 crore.

On Thursday, the Sensex rose marginally by almost 9 points to close 14,652.09 while the Nifty closed flat. It dropped by just 0.85 points to close at 4,223.40. Selling pressure was witnessed in index majors like Bajaj Auto, Satyam Computer and Bharti Airtel. However, the markets recovered as blue chips like Infosys and L&T witnessed fresh buying. Metal stocks were the top losers as metal prices on LME slipped. Turnover dropped on both exchanges to Rs 5,136.94 crore (BSE) and Rs 9,581.76 crore (NSE).

On Friday, the markets ended on a sober note with the Nifty sliding to 4,187.40 and the Sensex to 14,538.90. Turnover further dropped to Rs 4, 542.52 crore (BSE) and Rs 9,175.13 crore (NSE). The CNX MidCap dropped to 5292.15. This was after it kept rising the entire week from 5373.40 on Monday to 5410.40 by Thursday.

Interestingly, FIIs turned out to be net buyers the entire week. However, data from Monday to Thursday reveals that the mutual funds were net sellers.

The biggest gainers were Bajaj Auto (9.7 per cent) and ICICI Bank (5.03 per cent). The biggest losers were Hindalco (-5.32 per cent) and Satyam Computers (- 4.56 per cent).