Markets up 3%; gets sentiment boost from RBI and Infy

Tata Motors, Infosys among the top gainers for the week

With gains on four of the five trading session, markets had a stellar run for the week with the benchmark indices - Sensex up 3% and the Nifty edged higher by 3.1% for the week. The Sensex and the Nifty decisively closed above the 20,000 and the 6,000 mark respectively.

In the broader markets, the smallcap index gained 2.7% and the midcap index stepped up by 2.4% over the past five trading sessions.

Some of the positives that helped the investor sentiments were a sharp decline in trade deficit for September this year, RBI liquidity enhancing announcements for the banking system and finally a positive outlook from the Infosys management with an upward revision in revenue guidance for the full year. FIIs too took note of these developments and bought into the Indian markets.

Meanwhile, on the macro front, the industrial output -- after accelerating in the previous month -- remained subdued in August, according to data released today by Ministry of Statistics and Programme Implementation.

The Index of Industrial Production (IIP) grew by mere 0.6% in August compared to 2% growth in same month last year, dashing hopes of an industrial recovery in the second quarter.

Adding to this, the International Monetary Fund lowered India's growth forecast to 3.75% for this year from 5.7% earlier estimate. Taking note of the sharp revision downwards, Finance Minister P. Chidambaram said, "I know that the World Economic Outlook report does not share my optimism, but I may tell you that we do not share their pessimism.''

Rupee

The Indian currency closed at 61.08 against the dollar on Friday, a two-month high, compared with the previous close of 61.36, on the back of positive sentiments prevailing in the market. Besides that International Finance Corporation (IFC) launched India's first offshore rupee denominated bond issue, which hopes to raise $1 billion, thus helping dollar flows into the country.

Sectors & Stocks

On the sectoral front, Metal and Consumer Durables closed in the red, losing 0.1% and 0.6% respectively.

Among the gainers, Realty index gained nearly 9%, followed by IT, Capital Goods, Teck, Auto and Bankex indices, up 4-6%.

Health Care, Power and Oil & Gas indices saw gains of 1.5-2%.

FMCG and PSU indices closed marginally higher by 0.2% each.

From the Sensex pack, Tata Motors jumped 10% and hit a record high during the week. The stock was the top gainer for the week.

The other gainers from the auto space were Maruti Suzuki, Hero MotoCorp, Mahindra & Mahindra and Bajaj Auto which were up 1-2.5%.

IT bellwether, Infosys, gained 8.5%. Since Murthy's return, the stock has gained 36%.

TCS and Wipro too gained 1% and 4.5% respectively.

From the banking space, ICICI Bank, HDFC Bank, HDFC added 1.5-7%.

Among the metals, Jindal Steel and Tata Steel were up 7% each.

Oil & Gas names like ONGC, RIL and GAIL added 1-4%.

FMCG scrips had a mixed fortune with ITC up marginally by 0.5% while HUL slipped 0.7%.

L&T, Sun Pharma, BHEL, Bharti Airtel, Dr Reddys, Tata Power and NTPC were the other notable gainers, with gains between 1-7.5%.

The only names in the red for the week, having lost 2-8%, were Cipla, Sesa Sterlite, Hindalco and Coal India.