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Weekly-market: Markets end week with 3% rise on FII support

Saturday, July 2, 2011

 Sharekhan's weekly newsletter Visit us at www.sharekhan.com
 
July 02, 2011

 Market Commentary 

Markets end week with 3% rise on FII support

Concerns over Greece's debt problems took a back seat this week and aggressive buying by FIIs led the major support. The Indian markets closed the week with 3% advance 


Major news for the week:

  • Food inflation at 7.78% versus 9.13%
  • Fuel price hike to push inflation up: PMEAC
  • Cairn-Vedanta deal gets Cabinet panel nod
  • Economy to grow 8.5%: FM
  • Credit grows 20.7% in 12 months

Indian indices
Foreign institutional investors (FIIs) were the key drivers behind the rally this week. The sentiment received a boost from the fact that FIIs have sustained their buying activity and a rebound in global equities too aided rally. The Greece government approved the austerity plan and asset sale which re-ignited interest for riskier assets and equities across the world edged higher. Short-coverings this week also gave strength to the markets. 

Finance Minister Pranab Mukherjee said that the economy will grow by 8.5% in 2011-12 and the recent hike in fuel prices will not have much impact on the fiscal deficit, provided some relief to investors. The markets rallied in four out of five sessions of the week. The markets continued their rising trend for the second consecutive week.

The key benchmark indices surged to their highest level in more than 8 weeks. The Sensex swung 899 points between a high of 19031.38 and a low of 18132.7 to close the week at 18762.8, up by 2.86% or 522 points. The Nifty swung 272 points between a high of 5705.8 and a low of 5434.25 to close the week at 5627.20, up by 2.85% or 156 points.

Global indices
Easing Greece's debt worries triggered a strong rally across world indices. The Nasdaq outperformed its global peers this week, rising by 6.15%. CAC 40, Dow Jones and FTSE 100 indices rose over 5% each. Other global indices surged between 0.48-4.19%.

Sectoral and stock screening
All the sectoral indices closed the week on a strong note except BSE Oil & Gas down by 0.05%. BSE Fast Moving Consumer Goods (FMCG) stood the top gainer of the week surging by 4.24%, BSE Realty advanced by 4%, while BSE Metal and BSE Capital Goods (CG) up by 3.91% and 3.93% respectively. Rest of the indices ended the week higher in the range of 1.59-3.71%. 


On 'A' group stocks' front, Jaypee Infratech was the top gainer of the week rising by 19.92%, following that Pantaloon Retail surged by 13.43% and Shree Renuka Sugars gained by 13.41%. Top three losers of the week - Petronet LNG fell by 5.26%, Bhushan Steel slid by 4.72% and Sun TV Network lost by 3.15%.

FII/MF activity 
The FIIs were in buying mode this week and provided much needed support to the Indian markets. FIIs purchased Indian shares worth a net of Rs4,600.6 crore as against net sell of Rs1,126.1 crore seen in the previous week. The domestic institutional investors (DIIs) also bought Indian shares worth a net of Rs161.5 crore as compared to net buy of Rs1,026.3 crore seen in the previous week. 

 

TOP MOVERS (GROUP A) 
Company Price (Rs) % chg
Gainers
Jaypee Infratech

57.80

19.92

Pantaloon Retail (India)

318.45

13.43

Shree Renuka Sugars

68.50

13.41

Losers
Petronet LNG

135.85

-5.26

Bhushan Steel

440.00

-4.72

Sun TV Network

353.25

-3.15


 FII/MF ACTIVITIES

Rs (cr)

FII*

MF**

Gross purchase 13,591 1,993
Gross sale

8,990

1,831

Net investment

4,601

162

*As on June 30, 2011
**As on June 29, 2011

Outlook
The markets will soon enter the crucial period of corporate earnings. First quarter June 2011 earnings will be a major trigger driving the sentiments. The result season will start kicking in from the second week of July 2011. Investors will continue to watch the progress of the monsoon rains. Global cues, crude oil prices and FII flows may have bearing on the markets.  

 

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