Weekly report: Markets surge 5.2%

Markets clocked their best weekly gain since July 2009, up 5.2% for the week on the back of rally in IT shares and upbeat investor sentiment in the global markets.

The Nifty commenced the weak on a soft note as crude prices and Japan nuclear crisis weighed. Market picked up a positive undercurrent mid-week which was extended till Friday as foreign investors flocked in to pick bargain shares post the recent correction, setting aside problems in Japan and West Asia. The S&P CNX Nifty rose 2.4% to end at 5,654 and the benchmark Sensex gained 2.5%, to close at 18,816. Markets logged their biggest weekly gains since July 17, 2009 when the index had gained 10.9%.

Markets were able to hold on to the positive momentum as the India VIX (Volatility Index) also fell to low of 20 levels, down 3.8%

Global sentiment improved after Japan's markets rebounded 3.6% this week, economic indicators signaled recovery in the US markets and Brent crude stabilised below the $116/bbl mark after NATO (Non-Atlantic Treaty Organization) agreed for a no-fly zone over Libya

Back in India, the government on Friday said it would borrow Rs 2.5 lakh crore in the first half of FY12, or 60% of its total gross requirements for the year which was lower than the market expectation.

Markets sentiments improved with billionaire investor, Warren Buffett's decision to spend some money in India. His firm Berkshire Hathaway is looking to park funds in large investment destinations such as India. He said that Berkshire Hathaway would look at possible acquisitions in India as and when there were opportunities.

The government also introduced some key reform bills in the parliament this week, including the pension bill which will help cut government spending. The government also introduced the Constitution Amendment Bills to help implement GST.

However, food inflation crept back into double digits at 10.05% for the week ended March 12, breaking a three-week long downward spiral, as prices of vegetables, fruits and protein-based items increased. Inflation stood at 9.42% in the previous week. The latest rise marks the first time in a fortnight that food inflation has gone above a single-digit figure.

Realty shares bounced back after a recent fall. The BSE realty index was the biggest sectoral gainer and soared 9% this week 2,238.

DLF soared 13% to Rs 249 during the week. It was followed by Parsvnath Developes, Indiabulls Real Estate and Godrej Properties.

Better credit demand outlok buoyed banking stocks. BSE bankex jumped 6% to 12,926. The government sought parliamentary approval to amend a banking law for allowing investors in private banks to have voting rights proportional to their shareholdings.

Banking heavyweight, ICICI Bank soared 8.6% to Rs 1,091. HDFC Bank and SBI rallied 4-5% each. Yes Bank, Axis Bank, KOtak Mahindra BAnk, PNB and IDBI Bank were the other top gainers.

BSE IT index surged on better-than-expected US tech earnings data. Earnings estimate from IT companies in US bouyed market sentiments as the country is the largest market for Indian IT companies.

Among other Sensex stocks, Jaiprakash Associates gained 10% at Rs 90. BHEL jumped 8.5% to Rs 2,089 after bagging a contract from Power Grid Corporation of India.

Infosys rose 7.5% on hopes of outperforming TCS this year. HDFC, Bharti Airtel, Sterlite, M&M, Tata Power and Tata Motors surged 5-7% each. Market heavyweight, Reliance Industries surged 3.3% to Rs 1,026 on hopes that the higher crude oil prices will help boost refining margins.

Among other sectors, Fertilizer shares edged higher on reports demand for fertilizer may climb 4% this monsoon season. Sugar stocks were on the move after the government allowed increased level of sugar exports.