Sensex soars 973 points during the week

The BSE benchmark Sensex snapped its longest five-week losing spree since October 2008 by vaulting 973 points, the biggest weekly gain in absolute term in last 10 months, on across-the-board buying during the truncated week under review. The BSE and the NSE were closed on August 31 for ‘Eid’ and September 1 for ‘Ganesh Chaturthi’

Metal, realty, banking, auto and refinery stocks were at the forefront of the rally and were major contributors to the Sensex gain.

US Federal Reserve Chairman Mr Ben Bernanke on August 26 did not announce any new measure to boost the American economy, but left the door open for more action and showed optimistic view on long-term prospects of the world’s largest economy which gave a much-needed relief to investors across the globe.

As a result, the BSE 30-share barometer opened the week strong and registered its biggest single day gain of 567.50 points, or 3.58 per cent, in nearly six months on Monday. It never looked back and rallied to a high of 16,989.86 before ending at a two-week peak of 16,821.46, displaying a rebound of 972.63 points, or 6.14 per cent.

The wide-based NSE 50-issue Nifty also bounced back by a whopping 292.20 points, or 6.15 per cent, to end at two-week high of 5,040.00.

The Sensex had lost 2,873.47 points, or 15.34 per cent, and Nifty 886.15 points, or 15.73 per cent, in the last five weeks.

After pulling out Rs 3,186.20 crore in last week, foreign institutional investors (FIIs) injected Rs 2,321.98 crore during the week, including Rs 1,158.38 crore as per provisional figure.

DLF was the top gainer from the sensex pack with a rise of 18.28 pct after the country’s largest real estate player said it is “exploring various strategic options”, including the sale of its holdings in an IT park in Noida.

India’s largest steel maker by sales Tata Steel was the second top gainer with a surge of 15.69 pct. Other metal stocks like Jindal Steel spurted by 13.68 pct, Hindalco by 10.90 pct and Sterlite Ind by 9.71 pct.

From banking segments, ICICI Bank flared up by 8.18 pct, HDFC Bank by 7.40 pct and SBI by 5.57 pct.

Other sensex gainers were Jaiprakash Asso (12.66 pct), M&M (8.72 pct), Sun Pharma (8.66 pct), Tata Motor (7.99 pct), Bajaj Aut (7.96 pct), TCS (7.64 pct), HDFC (6.19 pct), Infosys Tech (5.04 pct), Coal India (7.55 pct), L&T (5.09 pct), Wipro (4.65 pct), ITC (3.23 pct) and Bharti Airtel (2.48 pct).

Among sectoral indices, BSE-Metal zoomed by 11.52 pct, BSE-Realty by 10.10 pct, Bankex by 6.87 pct, BSE-Auto by 6.50 pct and BSE-Oil&Gas by 6.35 pct.

Total turnover of BSE and NSE was low due to shortened week at Rs 6,661.18 and Rs 34,014.84 cr respectively.

The end of stand-off between the government and anti- corruption activist Anna Hazare last week over anti-corruption bill also aided the rally on the domestic bourses.

Metal stocks attracted heavy buying after rise in metal prices on London Metal Exchange (LMEX) and were the harbinger.

Interest rate sensitive counters from realty, banking and auto segments too were in demand after recent heavy sell-off on bargain hunting.

Short-coverings by wary operators, due to two-day public holidays during the week on Wednesday and Thursday, sparked off by a smart rebound in global stocks, also helped the benchmark Sensex to recover.

Analysts said that on Monday the market might react to a steep fall on Wall Street on Friday due to dismal jobs data as the world’s largest economy for the first time in a year failed to add new jobs. The US market will remain closed on September 5, for the Labour Day holiday.

Food inflation also rose to double digit, after a gap of five months, to 10.05 per cent for the week ended August 20 from 9.80 per cent in the preceding week, which might put pressure on the central bank to hike the key interest rates in their monetary policy review on September 16, they added.

Out of the Sensex pack 29 scrips ended with moderate to sharp gains. Only, ONGC dropped by 5.07 per cent following approval of a draft prospectus for a follow-on public offer (FPO) by company’s board of directors. The government planned to sell 5.0 per cent stake in ONGC through FPO.

RIL, country’s most valued company amid top heavyweight, notched handsome gain of 11.94 per cent in the week, adding the most to the Sensex gains.