Markets gained this week on hopes of more reforms from the government to attract foreign inflows. The government has already aised the cap on foreign direct investment (FDI) in insurance ventures to 49% from 26% and opened up the pension sector to overseas investors.
The BSE Sensex jumped 176 points or 1% to 18,938 in the holiday shortened week. The Nifty rose 44 points or 0.77% to settle at 5,747.
Markets on Monday ended a rangebound session of trade on the back of a steady growth in manufacturing activity. After a trading holiday on Tuesday, due to Gandhi Jayanti, markets advanced marginally again on Wednesday with visible buying interest in oil & gas and metal shares. It was Thursday's talk of reforms by the government that buoyed the index to its highest in 15 months. However, Friday saw investors booking profits especially in financial and software space.
From here on, markets will be looking at the November 30 GDP data, which is likely to show incremental improvement, for directions. That, along with a possible RBI rate cut a Cabinet reshuffle will set the stage for small but significant action.
In national news, manufacturing activity growth in September held steady compared with August, supported by a pick up in export orders and output, a business survey showed on Monday, but an increase in inventories could hurt growth in the future.
Exports in the month of August declined by 9.7% to $22 billion. Hit by a sluggish demand in the European market, India’s merchandise exports fell for the fourth month in a row, according to the foreign trade data released today. Compared with $24.73 billion in the corresponding period last year, exports fell nearly 10% to $22.33 billion in August. In July, the fall was 14.8%.
Realty stocks witnessed buying on hopes that the Reserve Bank of India might go ahead and cut the key rates which for long have been kept unchanged. The BSE realty index was the top sectoral gainer. The index advanced 5.5% or 102 to close at 1,950 levels. Capital goods stocks were also in demand through out the week, The BSE capital goods index jumped 3.5% or 382 points to 10,913. Among the other sectoral indices, consumer durables, FMCG, oil & gas, power and PSU stocks also witnessed some buying interest and the respective indices closed higher by 1.5-3.2% each.
On the other hand, healthcare stocks were amongst the worst hit in trades today as investors resorted to buying in the high beta sectors and booked profit in the healthcare space. The BSE healthcare index slipped 1.3% or 101 points to 7427.
Sharp appreciation in the rupee dollar equation attracted selling pressure in the IT stocks as a strong rupee against a dollar impacts the revenues of the IT companies adversely. The BSE IT index closed weaker by 0.2% at 5,910.
Indian automobile companies came out with their monthly sales figures. However, sales in India continued to be low in September, with seven of the country’s leading manufacturers together selling 192,424 units, a growth of a mere 0.6%. BSE auto index added 0.7% to 10,493.
Bharat Heavy Electrical Limited (BHEL) traded higher by 6.6% at Rs 263 on back of heavy volumes. The stock of state-owned heavy electrical equipment maker outperformed the market by appreciating 30% in past three weeks after the government announced multiple reforms to kick-start economic growth.
Bharti Airtel jumped higher during the week but ended flat at Rs 266. The Delhi High Court (HC) has ruled not to take action against the company. The high court has granted a stay on a government order asking the telecom major to stop offering 3G mobile services outside their licensed areas through roaming pacts.
Index heavyweight Reliance Industries rose 2.5% at Rs 857 after company said that RIL and Venezuelan state run oil company Petroleos de Venezuela have signed a 15 year heavy crude oil supply contract and a memorandum of understanding with PDVSA to further development of Venezuelan heavy oil fields.
HDFC was one of the top Sensex losers - down 3% at Rs 750 on back of multiple block deals at a discount on the NSE and BSE. According to reports, global private equity major, Carlyle Group, offloaded its 3.71% residual stake for about Rs 4,500 crore.
Sun Pharma's board of directors has approved the proposal to raise up to Rs 8,000 crore. The board has approved raising of funds worth up to Rs 8,000 crore through domestic or international offerings, Sun Pharmaceuticals said in a filing to the BSE. Shares of the pharma major slipped 1.3% to Rs 684.
Tata Motors, SBI, Hindalco, HUL, Larsen & Toubro, Maruti Suzuki, Dr Reddy's Labs, GAIL India, Tata Steel and ONGC advanced 2.4-5% each. While, Bajaj Auto, Cipla, Hero MotoCorp, Tata Power, Jindal Steel, Wipro, HDFC Bank and Infosys were among the laggards, down 1-4.4% each.
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