The receding fears surrounding the Dubai debt crisis and positive GDP numbers cheered the markets during the week, with the Sensex gaining 469.53 points or 2.82% at 17,101.54 and the Nifty adding 167.15 points or 3.38% to 5,108.9.
The United Arab Emirates central bank soothed frayed nerves on Sunday by guaranteeing emergency liquidity for banks and banking authorities worldwide clarified their positions about exposure to Dubai debt.
The Sensex had shed 390 points and the Nifty lost 111 points in the previous week as apprehensions that the debt restructuring plans of Dubai World could transform into a global contagion rattled markets worldwide.
The GDP numbers announced on Monday were beyond market expectations. The economy grew by 7.9 per cent in the second quarter of this fiscal, up from 6.1 per cent in the previous quarter due to a good showing by industry and services sector.
The manufacturing sector grew 9.2% in the second quarter vi-a-vis 5.1% a year earlier. Financing, insurance, real estate, and business services rose by 7.7 per cent against 6.4 per cent.
This was enough for the Planning Commission to hint at an upward revision in the projections for FY2009-10 and the finance minister Pranab Mukherjee to exude confidence regarding a growth rate of 7 per cent in this financial year.
Food inflation soared to 17.47 per cent during the week ended November 21 from 15.58 per cent a week ago. Onions turned dearer by more than 12 per cent and primary articles rose from 11.04 per cent to 12.53 per cent during the period.
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Meanwhile, the central government cleared the introduction of State Bank of India (Amendment) Bill in the current session of Parliament. The Bill will bring the government's holding in the country's largest public sector bank on par with other public sector banks at 51%.
However, a decision on the controversial Pension Fund Regulatory and Development Authority Bill (PFRDA) was deferred. The Bill would allow foreign players to hold up to 26% stake in Indian pension fund companies and pension funds to deploy part of their corpus abroad.
Tata Motors topped the list of weekly gainers, strengthening by Rs 80 or 12.73% at Rs 709.65. Hindalco added Rs 14.65 or 11.04% at Rs 147.30 and Bharti moved up Rs 26.20 or 9.24% at Rs 309.85.
However, Hero Honda weakened Rs 79 or 4.54% at Rs 1,666.50, Hindustan Unilever shed Rs 11.70 or 4.12% at Rs 272.20 and BHEL lost Rs 19 or 0.85% at Rs 2,208.85.
Tata Motors sizzled on higher-than-expected consolidated results and strong 44% growth in its vehicle sales in November. Hindalco hit a 52-week high of Rs 150.35 on December 4, fuelled by a QIB issue of Rs 2800 crore in the previous month and a hike in the product prices.
ABG Shipyard ended a six-month battle with rival Bharati Shipyard for a controlling stake in the offshore services provider. Bharati Shipyard and ABG Shipyard's open offer for Great Offshore opened on December 3 and end on 22. ABG Shipyard closed the week up Rs 25.45 or 13.62% at Rs 212.25 and Bharati Shipyard gained by Rs 67.05 or 43.50% at Rs 221.20. On the other hand, Great Offshore shed Rs 20.50 or 3.85% at Rs 512.45.
On Friday, the Indian markets had a soft opening. The US markets had dropped overnight after the services data raised concerns about the pace of recovery. The indices rebounded momentarily on strength in China, but later succumbed to weakness elsewhere. Asian and European markets sagged as investors awaited the US jobs data. The global markets were also digesting the impact of the European Central Bank's decision to start withdrawing stimulus measures. The Sensex ended the day at 17,102, down 84 points, and the Nifty closed down 23 points at 5,109.
Siddharth Bhamre, Head - Investment Advisory and derivatives, Angel Broking, said, “The US jobs data would determine the immediate trend. The markets are likely to trade in the 4,800-5,200 range this month, and action may be focused on mid-cap and small-cap stocks”.