The stocks have also witnessed volatility amidst thin trading in a holiday shortened week.
R. Chandrasekaran
CHENNAI: The Indian stock markets witnessed a jump of 1 percent driven by some favorable news from both the domestic as well as global. The stocks have also witnessed volatility amidst thin trading in a holiday shortened week. Of the four trading day sessions, the stock markets closed higher on three days with the derivatives expiry dragging the stocks on Thursday due to lower number of rollovers in future and options contract to January.
The higher close is supported by foreign institutional investors, who are net buyers of over $1 billion in the four-day trading sessions. The reports of Senate leaders meeting on Sunday to avert a possible $600 billion of automatic tax hike and cut in spending to take effect from January 1 has boosted the sentiments of investors in line with its Asian peers.
The upcoming week will also be guided by the fallout of the discussions on the fiscal cliff. The volatile trading pattern is likely to be continued next week too as investors will await the Indian current account data for the September quarter, which is due on Monday, and a hike in petroleum prices. The markets will also get cues from China’s purchasing manufacturing index, similar data from the U.S. and Europe, and the FOMC minutes of the meeting. The negotiations and the after effects of the U.S. fiscal cliff will also provide directions to the market sentiments.
On Monday, the Indian stock markets reversed its two days of losing streak and posted a slender gain. However, the Bombay stock exchange’s 30-share barometer Sensex advanced 162.37 points on Wednesday after the government’s announcement of incentives for exporters. But the following day witnessed a drag down of 93.66 points hampered by the derivatives contract expiry as futures and options witnessed a lower number of contracts to January.
The stocks, which are sensitive or linked to the interest rate, witnessed hectic interest among investors during the week ended December 28. For instance, banking and real estate stocks attracted the attention on the hopes of a rate cut in January. Similarly, oil companies witnessed frenzied buying activities on Friday following reports of a proposal to hike diesel price.
Among the major news that hit the markets during the week were sops for exporters to bump up merchandise exports, foreign institutional investors or FIIs remained net buyers of Indian equities to the tune of more than $4 billion in December and approximately $24 billion so far in 2012, and ECBs drop of 11 percent to $19.92 billion during the period of April to November. The National Development Council, which met on Thursday, gave its nod for an 8 percent GDP growth strategy in the next five year period.
The BSE’s benchmark index closed the week with a gain of 202.84 points of 1.05 percent at 19,444.84 points, whereas National Stock Exchange’s Nifty ended at 5,908.35 points, a gain of 60.65 points from the previous week’s 5,847.7.
Madras Cements is the top performer in the BSE’s A group shares with a gain of 9.89 percent. National Hydro Power Corp. and Gitanjali Gems advanced 8.25 percent and 7.81 percent respectively in the order. While 13 stocks advanced more than 5 percent, nine stocks edged up by 4 percent or more and 19 companies’ shares gained more than 3 percent.
In the Sensex components, Bharti Airtel gained 3.6 percent followed by Tata Motors and Wipro that advanced 3.4 percent and 3.2 percent respectively. Similarly, in the interest-sensitive stocks, LIC Housing edged up 5.4 percent, Federal Bank, and Union Bank of India gained more than 4 percent, whereas Canara Bank and Andhra Bank closed the week higher by 3 percent or more.
In the energy sector, Suzlon Energy advanced 5.75 percent mainly because of a single day gain of 7.5 percent on Friday after Morgan Stanley’s stake acquisition in the company. Oil companies, such as IOC, HPCL, BPCL and Reliance Industries have moved up by 2 percent or above following the reports of the proposal before the government to increase the diesel price.
On the losers pack, TTK Prestige led with a loss of 4.8 percent followed by AstraZeneca by 4.23 percent. Over 8 stocks shed more than 2 percent in the BSE’s A group shares, while 14 stocks recorded a fall of 1 percent or above during the week.
In the overall segment, 36 stocks witnessed 20 percent or above gain led by Flawless Diamond. However, the cynosure of traders was Mahanivesh that climbed 39 percent followed by Focus Industrials by 33.26 percent. Similarly, Anukaran Commercial plunged 88.55 percent in the overall group. Three stocks dropped more than 20 percent, while more than 70 stocks plummeted 10 percent or more during the week.
The upcoming week’s stock movement will be guided by the events that will unfold globally and locally with the focus on the U.S. fiscal cliff resolution.