Stock: In a truncated week, both the key indices, Sensex and Nifty, registered their biggest weekly gains in absolute term, 833.33 points and 253.25 points respectively, in the current calender year till now due to strong buying activity on a slew of positive developments.
The market resumed on a cautious but positive note after adjournment of Parliament for the third day without taking any decision on economic reforms amidst global factors like plans to finalise a bailout deal for Greece and budgetary stalemate in the US.
The bourses turned strong on Tuesday as international credit rating agency Moody’s said India’s outlook is stable. A debt relief package for Greece added to the positive mood.
The rally continued on Thursday, after Wednesday’s holiday, after financial major Goldman Sachs upgraded Indian stocks and sustained optimism that the Government will push through key economic reforms.
The market got further boost after the Government agreed for a debate on FDI in multi-brand retail under a rule which entails voting, a decision which ended logjam in Parliament.
As a result, operators as well as investors rushed to cover their short positions on the last day of November series on Thursday, hoping to see fresh reform process in the ongoing winter session of Parliament.
The Bombay Stock Exchange (BSE) index resumed higher at 18,574.36 and moved in a wide range of 19,372.70 and 18,508.79 before concluding the week at 19,339.90, posting a handsome gain of 833.33 points, or 4.50 per cent.
This was the 30-share index’s largest weekly gain since the last week of November 2011, when it had flared up by a massive 1,151.40 points, or 7.34 per cent, and in the process it scaled a 19-month high.
The wide-based S&P CNX Nifty of the NSE zoomed by 253.25 points, or 4.50 per cent, to end at over 19-month high of 5,879.85, a level not seen since April 21, 2011. The 50- issue index also recorded its largest gains in 2012.
Foreign Institutional Investors (FIIs), the main market movers, infused Rs 3,526.93 crore in the week, including provisional data of November 30.
FIIs have pumped in over USD 19.42 billion in the current calender year till November 27, as per Sebi data.
Buying was so strong that all 13 sectoral indices closed in the green, gaining between 2.42 per cent and 7.41 per cent, with consumer durable, realty, banking, metal, FMCG, capital goods, refinery and pharma segments taking the lead.
The market remained in cheerful mode on the last trading day of the week despite the July-Sept quarter GDP coming lower at 5.3 per cent, from 6.7 per cent in the same period a year ago as investors bet on a rate cut in RBI’s next policy review (on December 18) to boost economic expansion.
“If Government is able to push through some of the important reform initiatives, the markets will gain further, especially beaten down sectors like infrastructure, capital goods, public sector banks,” said Dipen Shah, Head of Private Client Group Research, Kotak Securities.
“The upcoming week will see some major economic numbers and events which shall impact the risk sentiments in both global and domestic markets. The much-hyped debate and voting on FDI in retail, Non-Farm Payrolls, other employment and PMI numbers from US and other developed economies shall dominate the headlines and impact trading,” a broker said.
“Positive international cues and reaffirmation of stable outlook on India by Moody’s sentimentally aided the rise in the markets,” Inventure Growth & Securities, Head Research, Milan Bavishi said.
Investor sentiment also got a boost following reports that Greece’s official creditors, including the International Monetary Fund (IMF) and European Union, have agreed on a deal to lower the country’s debt burden.
28 scrips out of the 30-share Sensex finished with gains while just two ended with losses.
Major gainers from the Sensex pack were Sterlite Ind (12.67 pc), Bharti Airtel (10.40 pc), Cipla (8.53 pc), HDFC (8.09 pc), Hindalco (7.83 pc), Jindal Steel (7.29 pc), Wipro (7.17 pc), ICIC Bank (7.14 pc), Bajaj Auto (6.27 pc), Tata Steel (5.78 pc), ONGC (5.50 pc), Tata Power (5.39 pc), Tata Motor (5.20 pc), HDFC Bank (5.10 pc) and L&T (5.06 pc).
Among the sectoral indices, the BSE-CD rose by 7.41 per cent, followed by BSE-Realty (6.92 pc), Bankex (5.87 pc), BSE-Metal (5.65 pc), BSE-CG (4.23 pc), BSE-FMCG (3.83 pc), BSE-Teck (3.76 pc), BSE-Oil&Gas (3.31 pc) and BSE-HC (3.16 pc).
The total turnover at BSE and NSE rose to RS 11,966.64 crore and Rs 62,786.40 crore respectively in the shortened week as against the last week’s level of Rs 9,738.30 crore and Rs 45,600.92 crore.
Forex: Breaking a four-week long losing string, the rupee bounced back by a whopping 125 paise to close the week at 3-week high of 54.26 against the dollar during the shortened week under review on the back of strong rally in local equities amid sustained heavy capital inflows.
Ending the logjam over the FDI in multi-brand retail in the Winter session of Parliament and consistent dollar selling by exporters on hopes of further fall in the dollar overseas also boosted the rupee sentiment.
At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced better at 55.45 from last weekend’s close of 55.51, but touched a low of 55.89 on the same day on sustained dollar demand from importers, mainly oil refiners, to meet their month-end needs and also standoff in the Lok Sabha over the FDI issue.
“The rupee continued its last week’s weakness on the first day of the current week after the political logjam continued for the third straight session as the government is lacking clear mandate to go ahead with the set of financial and non-financial policy reforms,” Alpari Financial Services (India) CEO Pramit Brahmbhatt said.
However, it bounced back on Tuesday after rating agency Moody’s kept the India’s outlook stable because of the country’s strong economic growth along with high savings and investment rates. Sharp rise in local stocks later also aided the rupee sentiment.
The rupee later rallied to settle at the week’s high of 54.26, a rise of 125 paise or 2.25 per cent. In last four weeks, it had tumbled by 195 paise or 3.64 per cent.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said: “The initial weakness in rupee can be attributed to the political log jam which had stalled the Parliamentary proceedings for the four straight sessions.
He said, “The cautious tone of equity markets also supported for a weaker cause in rupee on the first day of the week. The Moody’s retaining its stable outlook on India’s sovereign rating Tuesday, citing strong economic expansion and a healthy savings and investment rate that exceeded other emerging economies, later boosted the rupee sentiment.”
He added: “The rupee was sharply higher after the holiday while ending the week around the weekly highs. Increasing capital inflows too supported the rupee. Strong risk on sentiments continued to support the domestic and global markets as the Whitehouse and Senate is expected to come over a budgetary deal avoiding the ‘fiscal cliff’ The US government said it will not push the economy off the rails and will definitely fix the fiscal cliff by the end of December.”
Mr. Brahmbhatt said the Euro and GBP edged higher to over two months high on active risk on sentiments in global markets supported by the recovery in top two economies and a smooth sailing of the Greece deal.
“The much hyped debate on FDI in multi brand retail in Parliament and the voting on the Bill if passes through then shall induce sharp gains in rupee making a complete turnaround for the pair,” he added.
The crucial levels for rupee appreciation is 53.80 and for depreciation is 55.40 levels, which can be closely watched as rise above 55.40 levels shall weaken the pair till 55.90 levels,” he further said.
The RBI fixed the reference rate for US dollar and euro at Rs 54.5265 Rs 70.8880 from Rs 55.3445 and Rs 71.3665 respectively in the last weekend.
The rupee premium for the benchmark six-month forward dollar payable in May closed the week at 165-167 paise.
Far-forward contracts maturing in November ended at 309-311 paise.
The rupee bounced back against Pound Sterling to end the week at 87.09 from previous weekend’s close of 88.48. The local currency also turned positive against the euro to close at 70.62 from last weekend’s level of 71.61.
However, it shot up further against the Japanese yen to close at 65.63 per 100 yen from 67.49 last weekend.
Oil and oilseeds: Edible oil prices traded mixed, while non-edible prices recovered at the oils and oilseeds market during the week under review.
Groundnut oil prices rallied smartly on stockists and retailers demand amidst limited arrivals from producing belts.
Refined palmolein on the other hand, fell owing to lack of retail buying support on the back of bearish Malaysian cues.
Castorseeds bold and castoroil commercial gained on rising demand from shippers and soap industries.
However, castorseeds futures eased further on selling pressure from retailers following weak export enquiries.
Linseed oil prices held stable in the absence of any largescale buying activity.
Markets remained closed on Wednesday, November 28 on account of “Guru Nanak Jayanti“.
In the edible oils segment, groundnut oil resumed higher at Rs 1,250 and advanced further to close at Rs 1,260 from last weekend’s level of Rs 1,240 per 10kg, showing a rise of Rs 20.
Refined palmolein opened higher at Rs 516, later drifted to Rs 500 before finishing at Rs 493 from preceding weekend’s level of Rs 513, showing a loss of Rs 20 per 10kg.
In the non-edible section, Castorseeds bold resumed steady and later moved in the range of Rs 3,400 and Rs 3,450 before closing at Rs 3,475 from last weekend’s level of Rs 3,425, a net gain of Rs 50 per 100 kg.
Castoroil commercial also opened stable and later moved in the range of Rs 710 and Rs 720 before closing at Rs 725 from its previous weekend’s level of Rs 715, a gain of Rs 10 per 10kg.
Linseed oil maintained a steady trend at Rs 820 as its preceding weekend’s level of Rs 820 per 10kg.
Moving to the futures section, castorseeds for the December delivery resumed lower at Rs 3,575 and hovered between Rs 3,590 and Rs 3,513 before concluding at Rs 3,575 from last Saturday’s closing level of Rs 3,590 showing a modest loss of Rs 15 per tonne.
Bullion: Both the precious metals suffered a sharp setback at the domestic bullion market here during the week under review.
Precious-Gold failed to maintain its buoyant momentum and tanked to hit a three-week low on the back of heavy unwinding from speculators and stockists following overall global bearishness.
Sluggish demand outlook amid a firmer rupee further dampened sentiment. Though there was some modest up—tick in view wedding season offtake, most retail investors’ refrained from making any purchases hoping further slump in prices.
The plunge came after the shiny metal conquered a fresh historic high at the start of the week driven by heavy investment buying spree.
The metal lost more than 3 per cent during the week recording its steepest fall in this current calender year so far.
Silver also exhibited great volatility throughout the week and fell sharply after scaling to a fresh 12—month high on frantic speculative profit-taking.
On the global front, investors’ confidence in gold was battered after a sudden mid-week sell-off, its biggest one-day fall triggered by growing uncertainty over the recent Greek debt deal and looming fiscal crisis in US amid strong dollar valuations.
The industrial metal also came under renewed selling pressure amid subdued demand.
In New York, gold for the December delivery dropped to USD1,712.70 an ounce from last weekend’s level of USD1,751.40 an ounce.
The March contract also declined to USD 33.28 an ounce.
Standard gold (99.5 purity) commenced strong at Rs 32,525 and moved further to Rs 32,530, but later plummeted to finish at Rs 31,275 from preceding weekend’s level of Rs 32,340, showing a steep fall of Rs 1,065, or 3.29 per cent per 10 grams.
Pure gold (99.9 purity) started higher at Rs 32,665, but later slumped to conclude at Rs 31,430 over its previous close of Rs 32,485, registering a sharp loss of Rs 1,055, or 3.25 per cent per 10 gram.
Silver ready (.999 fineness) opened firm at Rs 64,230 and firmed up further to Rs 64,350 before drifting back to end at Rs 62,735 from its last weekend’s close of Rs 63,960, showing a hefty fall of Rs 1,225, or 1.19 per cent per kg.