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Sensex, Nifty registers best weekly gains in last 2-1/2 yrs

The stock markets broke strong four-week of losses as players flocked back to the bourses on some positive news overseas as well as fall in food inflation respectively and registered their best weekly gains since mid-July 2009.

business Updated: Dec 03, 2011 16:43 IST

Stocks: The stock markets broke strong four-week of losses as players flocked back to the bourses on some positive news overseas as well as fall in food inflation, sending both the indices to settle the week at two-week highs of 16,846.83 and 5,050.15 respectively and registered their best weekly gains since mid-July 2009.

Hopes of a concrete solution to the euro-zone debt crisis after a decision of a six world's major central banks cut dollar funding rates to keep money flow in global financial markets as we all International Monetary Fund was planning to bail out Italy to help contain the ongoing debt crisis, mainly buoyed the market sentiment world-wide.

Positive US jobs data on Thursday too helped the market recovery. All eyes are not set on the outcome of the December 9 summit where the European leaders expect bold solution on the debt issue.

Back home, slow down in country's gross domestic product (GDP) for the Q2 of 2011-12 and steep fall in food inflation for the fourth week in a row to 8.0% for the week ended November 19 from 9.01% in the last week that might gave some sign of relief to the government as also the central bank to pause the hike in the interest rates.

Buying was so strong that all 13 sectoral indices closed with sharp to marked gains between 1.82% and 10.52% with Metal, bankex, refinery, power and IT segments were the harbinger.

The Bombay Stock Exchange 30-share barometer resumed up and remained in positive terrain throughout the week to settle at 16,846.83, a net rise of 1,151.40 points or 7.34%. Previously, it had shot up by 1,240.70 points in a week of mid-July, 2009.

The NSE 50-share Nifty also shot up by 340.10 points, biggest gains in 2-1/2 years in absolute term, or 7.22% to end at 5,050.15. It had also lost by 650.65 points of 12.14% in the last four weeks.

Indian Inc blamed slow down in industrial growth to tight policy which has increased the cost of borrowings.

Renewed buying by foreign funds in last couple of days also supported the uptrend. FIIs injected Rs 1,641.49 crore in last three days since November 30, including provisional data of December 2.

World markets got a sigh of relief after the US Federal Reserve, and the central banks of the UK, Canada, Japan and Switzerland declared that they had agreed to slash the cost of offering dollar financing through swap deal.

Global stocks climbed on renewed optimism that European officials were poised to take action to alleviate debt crisis wreaking havoc in the euro zone.

Metal stocks were the harbinger of the rally after rise in metal prices on London Metal Exchange (LMEX) as a result, sectoral BSE-Metal index spurted by 10.52%.

IT stocks rose on positive economic data in US and after major central banks on Wednesday moved to tame a liquidity crunch for European banks by providing cheaper dollar funding.

Among the sectoral indices, BSE-Metal flared up by 10.52%, the Banked by 8.00%, BSE-Oil and Gas by 6.47%, BSE-Power by 6.23%, BSE-IT by 5.98%, BSE-PSU by 5.76%, BSE-Teck by 5.58% and BSE-Auto by 5.46%.

Investors wealth has risen by nearly Rs 3.0 lakh crore in the week.

All the 30 shares in the sensex pack ended higher.

Among the major gainers Hindalco shot up 19.10%, Tata Steel 11.96%, State Bank Of India 11.58%, Tata Motors 11.32%, Jaiprakash Asso 10.87%, TCS 10.59%, NTPC 9.72%, DLF 9.54%, ICICI Bank 9.49%, Jindal Steel 9.46%, Sterlite Ind 9.40%, HDFC 8.80%, Sunpharma 8.55%, Coal India 8.29%, HDFC Bank 7.94%, Reliance Industries 7.53%, ITC 7.36%, Wipro 6.70% and ONGC 6.43%.

Total turnover at the BSE and NSE was Rs 9,980.59 crore and Rs 55,291.88 crore respecively as against the previous weekend's level of Rs 10,238.42 crore and Rs 51,759.71 crore.

Forex: In sync with smart rebound in local equities amid sustained selling by exporters and some corporates, the Indian rupee also bounced back by 105 paise to end at two-week high of 51.20/21 against the US currency .

Continued capital inflows amid weak dollar overseas after hopes of concrete solution to the euro-zone problems by the european central banks and also International Monetary Fund (IMF) also supported the rupee rise.

In fairly active trade at the Interbank Foreign Exchange (Forex) market, the domestic unit opened higher at 52.06/07 a dollar from last weekend's close of 52.25/26.

Later, it moved in a range of 52.43 and 51.19 before settling the week at 51.20/21, a net rise of 2.01%. In four week of losses, the rupee had crashed by 349 paise or 7.16%.

The Indian benchmark sensex, which was also slumped by 2,109.37 points or 11.85% in last straight four weeks, recovered by a massive 1,151.40 points or 7.34% in the week, mainly boosting the rupee sentiment.

Recent, sustained rise in the local equities also compel foreign funds to infuse money in stocks. FIIs were met buyers in last three days in a row, after pulling out over USE 1.25 billion in last 11 days since November 15.

Sustained dollar selling by exporters and importers on hopes of further fall in dollar value overseas too kept the rupee on higher side.

First Published: Dec 03, 2011 16:02 IST