After three weeks of losses, the Sensex ended this week with a gain of 830 points or 4.3% on the back of robust economy news. The markets strengthened on the back of favourable GDP numbers, rise in business activity in service sector and growth in merchandise exports. Also, bargian hunting in beaten down realty sector helped improve the market sentiments.
It was an event filled week for the markets as deluge of economic data gave direction to the markets. The up beat GDP growth of 8.9% for the second quarter gave fillip to BSE Sensex. The government is planning to revise the GDP forecast to 8.75% for FY12, rapid economic expansion is expected to attract huge fund flows into the markets.
Energy major - ONGC led the charge with a gain of nearly 7% at Rs 1,320 following the government nod for a bonus-cum-stock split proposal. Additionaly, the overwhelming response to the state-run manganese producer MOIL IPO also triggered a wave of fresh buying in PSU stocks. The IPO was subscribed 56 times, with 38.6 times retail subscription. Furthermore, government's move to recapitalise nine PSU banks and a proposal to dlilute 10% stake in Neyveli Lignite.
Inflation also eased to single-digit for the first time since May 2009 raising expectations of further decline in food prices and easing pressure on the Central Bank to tighten the monetary policy.
Investors cherry picked stocks from the realty space which were battered down badly (20-50%) following the loan-for-bribe scam, giving the markets much needed lift. Among the sectoral indices, realty, the biggest loser from the previous week bounced back to be the top gainer this week gaining 7.5%. Bankex and PSU were up 5.8% each, followed by FMCG, Consumer Durables and Healthcare adding 2% gain each for the week.
The stocks that aided the bounceback in the realty space were Orbit Corporation up 21% followed by Phoenix Mills, HDIL and D B Realty moving north by 13% - 14%.
Tata Motors up nearly 13% was the top gainer in the Sensex-30 stocks followed by Jindal Steel, Cipla moving up by 9% and 11% respectively. Other major gainers included Hindalco, SBI, Reliance Communications, DLF, Mahindra & Mahindra, Wipro, BHEL and ICICI Bank. Index heavyweight Reliance Industries advanced 4.5%.
On the other hand, Hero Honda shed 5%. The stock fell on reports that Hero Honda has agreed to increase royalty payments to automaker Honda Motor. ACC and Reliance Infrastructure were the other major losers.
