India's benchmark share indices, the Bombay Stock Exchange's Sensex and the National Stock Exchange's Nifty, surged over 7% in the week to December 2 on the back of strong global cues.
For the week ended December 2, the Sensex jumped 1151 points or 7.3% to end at 16,847 . The S&P CNX Nifty surged 340 points or 7.2% to close at 5050.
Key European share indices rose during the week following a concerted effort by the US Federal Reserve, European Central Bank, Bank of England, and Central Banks of Canada, Japan and Switzerland to increase liquidity in the banking system to tide over the debt crisis. They decided to lower pricing on US dollar swaps by 50 basis points from December 5.
Further , sentiment in the region was also boosted after the Heads of State and Government of the European Union, decided to hold a summit at Brussels on December 9, 2011 to find a probable solution to the European debt crisis.
Markets started the week on a promising note as key share indices surged higher on the back of strong global cues. The Sensex and the Nifty both gained 3% each on the back of shortcovering in index heavyweight Reliance Industries and financial shares.
However, the rally was shortlived and both indices lost 1% each on Tuesday as the political logjam over the retail FDI issue weighed on market sentiment and investors turned cautious ahead of Jul-Sep GDP data scheduled for release on Wednesday.
Wednesday, shares bounced back again, shrugging off weak global cues, after India’s Jul-Sep GDP growth was in line with expectations at 6.9%. Interestingly, the Sensex dropped 8.9% in November, the biggest per centage point fall in fiscal 2012 (Apr-Mar) so far.
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Benchmark share indices gained for the second straight session Thursday rising over 2% on the back of strong rally in the global markets and expectation that the Reserve Bank of India may pause from interest rate hike after inflation showed signs of moderation. Government data showed, food inflation witnessed a sharp moderation to 8% for the week ended November 19, compared with 9.01% in the previous week ended November 12.
Benchmark shares indices ended higher for the third straight session Friday, after lackluster trading in the first half, as a strong opening of European shares boosted the sentiment. Gains were led by index heavyweight Reliance Industries, financial and technology shares.
Sector wise metals was the top gainer on the back of shortcovering at lower levels, followed by banks, oil and gas and technology shares.
Bank shares surged on expectations that the RBI may pause interest rate hike at its next meeting scheduled for December 16. Shares of software exporters gained on signs of improvement in the US and the Europe. Oil and Gas shares were led by Reliance Industries and ONGC.
The BSE Metal Index was up 10.5%, Bankex was up 8%, Oil and Gas up 6.5% and IT Index was up 6%.
During the week, Reliance Industries gained 7.6%, ONGC up 6.4%, Hindalco was up 19%, Tata Steel was up 12%, Hindalco was up 19%, TCS was up 10.8%.
Educomp Solutions was the stock of the week up 18% after it said that it has received a sanction towards buy out of its receivables from one of the leading public sector banks. The gross amount of the sanction is Rs. 410 crores.