The promising 9-week rally has finally come to an end. Markets were cruising along nicely and scaling fresh two-year summits with the passing of every week. The barometer Sensex had surged nearly 13% or more than 2,000 points between February 5 and April 9 on the back of record FII inflows. But apprehensions on the interest rate front extracted a toll on the rate-sensitive space this week and thereby proved to be the nemesis of the markets as a whole. The Sensex ended the week with a loss of almost 2 per cent at 17,591 and the Nifty shut shop at 5,262, lower by 99 points or 1.8%.
The rate-sensitive auto and banking sectors saw a fair amount of profit taking ahead of the RBI credit policy review meet early next week. The markets expect the central bank to hike the rates on April 20 as inflation claws its way back to double-digit figures. Hero Honda was the major loser on the BSE. The stock was down nearly 7% at Rs 1,919. HDFC weakened by 5.9% at Rs 2677 and ICICI Bank shed 5.7% at Rs 921. Reliance Communications, Sterlite and Mahindra & Mahindra were down 4-6% each.
RIL lost steam after crossing the 1100 mark to end the week down 3.6% at Rs 1123. News of a stake purchase in Deccan 360 for a consideration of $20-30 million did nothing to arrest the fall in the share price. And debutant, Goenka Diamond & Jewels ended Day 1 at a discount of 11%. The jewellery stock ended at Rs 123 compared to its issue price of Rs 135 a share.
Infosys seemed to be in a different league though. The stock spurted 4% to Rs 2785 as a positive FY11 guidance evinced renewed investor interest in the bellweather. And the positive sentiment had a infectious effect on other information technology players. TCS rallied nearly 3% at Rs 814 and Wipro added 1.7% at Rs 710. Tata Steel and Hindustan Unilever were the other prominent gainers.
Meanwhile, the annual rate of inflation based on the wholesale prices index went up marginally to 9.9 per cent in March from 9.89 per cent a month ago. The annual inflation rate was 1.2 per cent in March 2009.
But food inflation fell to 17.22%. The food price index rose 17.22% in the 12 months to April 3, compared to an annual rise of 17.70% in the previous week. And the primary articles index was up 13.88% during the same period.
