Weekly wrap: Sensex gains 750 pts

After three successive weeks of losses, the market bounced back in a telling fashion during the week ended January 30, on the back of positive global cues and some reasonably good numbers from India Inc and romped home with impressive gains. Short-covering due to expiry of January series derivative contract too contributed to the upmove during the week.

Recording strong gains on three of the four trading sessions (the market was closed on Monday, on account of Republic Day), the Sensex ended the week with a handsome gain of 749.89 points or 8.64% at 9424.24. The Nifty index of the National Stock Exchange gained 196.25 points or 7.33% to 2874.80.

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It was a nice start for the market last week with the firm trend on the Asian bourses, higher US index futures and short-covering after some hefty losses in the past few weeks triggering frenzied buying across the board on Tuesday. A few good numbers from India Inc also aided the sentiment to a notable extent.

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The Sensex raced past 9000 and settled at 9004.08 for the day with a handsome gain of 329.73 points or 3.8%. The Nifty closed at 2771.35 with a gain of 92.80 points or 3.46% at 2771.35. The Nifty touched a high of 2777.30 today.

The decision of the Apex bank to leave key rates unchanged did trigger a round of selling but the market rebounded swiftly after a sharp correction and kept gaining ground quite consistently till the end of the session that day. The central bank, as it made its policy statement, lowered the GDP growth projection to 7% from 7.5% - 8% earlier. The Apex bank also stated that it expects inflation to be lower than the projected 7% by March 2009.

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After moving in a tight range for more than a couple of hours, the market rallied sharply during the final hour of trade on Wednesday on some frenzied buying in heavyweight stocks, presumably on short-covering. The late recovery on the Asian bourses and a firm trend in European markets too contributed to the rally. The Sensex gained over 250 points in that session while the Nifty moved up by around 78 points.

Global meltdown and stock market

On Thursday, the market turned easy as investors stayed wary of holding positions at higher levels and chose to book profits after two successive days of gains. There were some strong spells for a few stocks due to short-covering ahead of expiry of F&O contracts, but the negative start on the European bourses and lower US index futures rendered the market subdued in afternoon trade that day. Inflation rose marginally, but that did not trigger any significant sell-off. The Sensex and Nifty eased by around 21 points and 25 points respectively.

The market shrugged off a weak start and rallied higher on the back of some good numbers from India Inc, especially from Larsen & Toubro, and signed off on a firm note on Friday. FMCG, oil, realty, metal, auto, bank and capital goods stocks recorded impressive gains. The Sensex notched up 188 points, while the Nifty climbed up by over 50 points in that session.

Sun Pharmaceuticals (down 0.2%) was the only Sensex stock to end on a negative note last week. The stock suffered a sharp loss on the final session after its associate firm in US reported a sharp fall in earnings. From the Nifty pack, Suzlon Energy (down 3.3%), GAIL India (down 2.1%) and Punjab National Bank (down 1.5%) closed on a negative note.

Jaiprakash Associates, which moved up by nearly 24%, was the biggest gainer in the Sensex. Reliance Infrastructure shot up by close to 20%. Sterlite Industries, Ranbaxy Laboratories, Reliance Industries, ICICI Bank, Mahindra & Mahindra, Hindalco, Tata Steel, Maruti Suzuki, Tata Motors, HDFC, State Bank of India and DLF gained 10% - 15.5%.

Infosys Technologies surged 8.4%. Wipro advanced by a little over 8%. Larsen & Toubro, Tata Power, ACC, Reliance Communications, HDFC Bank, Hindustan Unilever, NTPC, ITC, Tata Consultancy Services and Grasim Industries moved up by 5% - 7.5%. Bharti Airtel and ONGC gained 3% and 1.9% respectively while BHEL ended flat.

Zee Entertainment vaulted 20.5%. Unitech zoomed 19.3%. SAIL notched up a hefty gain of 15.7%. Reliance Petroleum posted a gain of 12.6%. Reliance Capital, Siemens, Idea Cellular, ABB, Reliance Power, HCL Technologies, Cairn India, Nalco, Ambuja Cements, Tata Communications, Hero Honda, Cipla and Power Grid Corporation also closed on a firm note last week.

Among the sectoral indices, BSE Metal shot up by 15.21% last week. The Realty and Oil & Gas indices surged 10.2% and 10.11% respectively. The Bankex, IT and Teck barometers moved up by 9.26%, 8.09% and 6.45% respectively. BSE Auto, CD, CG, FMCG, Power and PSU gained 3% - 5.5%. BSE Healthcare, the only loser last week, ended with a slender loss. The Midcap index ended 3.2% up while the Smallcap barometer firmed up by 2.57%.