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 Market Commentary 

Sensex tops global chart for the week; RBI policy caps upside 

Indian benchmarks posted sharp gains on Mint Street as the rupee strengthened against post FOMC decision. The Sensex shut shop gaining 2.69% while the Nifty rose 2.73% for the week ended September 20, 2013. 

Major Headlines for the week:

• August 2013 WPI Inflation at 6.10% 
• FDI inflow up by 12% in July month
• Goldman Sachs remains Underweight on Indian shares
• Net direct tax collection up 12.5%
• RBI raises repo rate by 25 bps
• India growth forecast reduced to 4.8% for FY14: Fitch

Indian indices:
Welcome to the 'Weekly Market Wrap' for September 21, 2013. This was the Thirty eighth trading week of 2013 for the Indian markets marked sharp rally for third straight week owing to recovery in rupee which boosted sentiment. Key benchmark indices edged higher in the week gone by as the rupee continued to firm against the dollar since hitting record low. Markets rallied on Thursday, 19 September 2013 after the US Federal Reserve after a monetary policy review on Friday, 20 September 2013, decided to maintain stimulus to the US economy through monthly bond purchases of $85 billion.

However, the gains were capped after the Reserve Bank of India, in a surprise decision, raised its key policy rate The barometer index, the S&P BSE Sensex, regained the psychological 20,500 level but could not maintain the same till the end of the week and NSE Nifty ended above 6000 level. The markets gained in four out of four trading sessions in the week.

The S&P BSE Sensex rose 530.95 points to close above 20000 mark at 20,263.71 and the NSE Nifty rose 161.50 points to settle above key 6000 mark at 6012.10.

Major events for the Week:

• WPI inflation for August 2013 came in at 6.1% as compared to 5.79% seen in the July month, higher than market estimates.

• RBI raised repo rate by 25 bps to 7.50%; lowers Marginal Standing Facility rate by 75 bps to 9.50%, relaxes banks' minimum daily Cash Reserve Requirement (CRR) to 95% of deposits from 99% from September 21.

Weekly market trend from September 16, 2013 - September 20, 2013:

• On Monday (September 16, 2013), the Indian equities remained highly volatile throughout the day and closed on a flat note. The BSE Sensex up 0.05% and the Nifty was down by 0.17%. Indian markets trimmed most of its gains led by weak inflation figures and also the HSBC downgraded Indian shares to "underweight" from "neutral" on Monday, citing the recent rally and downside risks to growth. The Sensex ended at 19742.47, up by 9.71 points, while the Nifty shut shop at 5,840.55, down by 10.05 points.

• Benchmarks rose on Tuesday (September 17, 2013), led by gains in IT and technology stocks tracking weakness in the rupee and as recent underperformance of these sectors made short-term valuations attractive. The Sensex rose 0.31% while the Nifty added 0.17%. Markets ended flat amid a volatile trading session, as investors exercised caution ahead of the two-day FOMC meet starting today and Reserve Bank of India's monetary policy later this week. The Sensex closed at 19,804.03, up by 61.56 points, while the Nifty rose by 9.65 points to close at 5,850.20.

• Markets ended on a strong note on Wednesday (September 18, 2013), after an extremely volatile trading session this Wednesday, on back of significant buying witnessed in the realty and bank spaces. The Sensex rose 0.80% while the Nifty added 0.84%. Benchmarks ended with surprises, marking its second consecutive day of gains on continued foreign investment inflows while stocks perceived as defensive gained ahead of the conclusion of the U.S. Federal Reserve meeting later in the day. The Sensex closed at 19,962.16, up by 158.13 points, while the Nifty rose by 49.25 points to close at 5,899.45.

• India's NSE index rose as much as 4%, marking its highest level in nearly 3 months on Thursday (September 19, 2013), led by gains in bank shares after the US Federal Reserve stunned markets by deciding not to taper its asset-buying programme. The Sensex rose 3.43% while the Nifty added 3.66%. The BSE Sensex marked its highest close since November 2010. Banking stocks were the star performers of the day; BSE Bankex ended 7% higher as the top sectoral gainer. The Sensex closed at 20,646.64, up by 684.48 points, while the Nifty rose by 216.10 points to close at 6,115.55.

• On Friday (September 20, 2013), markets snapped a 3 day winning streak after a surprise rate hike by the central bank led to a slide in rate-sensitives like banking and auto shares. The BSE Sensex fell 1.85% and the Nifty was down by 1.69%. Main Street ended its journey on a south route as markets shut shop in red after recovering some of its losses in late trades, amid a volatile trading session on Friday, after the RBI governor Raghuram Rajan indicated the marginal standing facility rate would be lowered more than the quantum of repo rate hikes. The S&P BSE Sensex shed 382.93 points to close at 20263.71 while Nifty slipped 103.45 points to end at 6012.10

Global indices:
All the global markets closed in the green zone except Shanghai Composite which fell by 1.98%, Hang Seng rose 2.56%, Nikkei rose 2.32%, CAC40 up by 2.17%, Dax100 rose 1.95%, Nasdaq rose 1.41% and Dow Jones up by 0.49%.

Sectoral and stock screening:
All the 13 sectoral indices closed in the green zone except BSE Realty and BSE HC which fell by 2.37% and 0.51% each- the topmost gainers were - BSE Bankex which rose 4.99%, BSE FMCG up 4.60% and BSE Auto gained 2.38%.

Looking at the 'A' group stocks, the top three gainers of the week were - Yes Bank up by 26.71%, GMR Infrastructure rose 21.29% and JSW Steel up by 18.67%. The top three losers of the week were - Ranbaxy Labs fell by 27.07%, Financial Technologies fell by 19.92% and Gitanjali Gems fell by 18.85%.

FII/MF activity:
The foreign institutional investors (FIIs) have been the net buyers of the Indian stocks to the tune of Rs1190.7 crore as on September 18, 2013 and the domestic investors sold Indian shares worth a net of Rs413.1 crore as on September 17, 2013.