Rajan effect: Benchmark indices gain nearly 4%

Sensex gained 650 points or 3.5% to close at 19,270 and the Nifty added 202 points or 3.7% to end at 5,674

Markets edged higher during the week with the BSE benchmark index- Sensex regaining the 19,000 levels amidst volatile trades as Rupee recovered against the Dollar as the new central bank Governor Raghuram Rajan unleashed a slew of measures to prop the Rupee and support the faltering economy.

For the week, the Sensex gained 650 points or 3.5% to 19,270 and the Nifty gained 202 points or 3.7% to 5,674.

The broader markets too had a good run with the midcap index up 2.84% and the smallcap index posted gains of nearly 3%.

The Indian currency strengthened against the dollar considerably through the week after the new central bank chief announced his plans to help stabilize the rupee. At close on Friday, the partially convertible rupee was at 65.24, regaining much ground as compared to an all time low of 68.85 which the currency hit on 28 August 2013.

On the sectoral front, for the week only IT and technology indices closed in the negative, down 2% and 1% respectively as Rupee gained against the Dollar.

Banking index was the top gainer up 10% followed by PSU, Oil & Gas, Capital Goods, Metal, Power and Realty indices adding 3-8%.

Banks gained as the new RBI chief said that the central bank will shortly issue the necessary circular to completely free bank branching for domestic scheduled commercial banks. He also, added that there is need to reduce the requirement for banks to invest in government securities in a calibrated way such as to ensure the flow of credit to the productive sectors.

FMCG, Auto, Health Care and Consumer Durables indices too closed in the green, up 2% each.

Of the Sensex-30, 21 scrips closed higher with gains of atleast 2%. In the process, these 21 companied added Rs 1.35 trillion to their market capitalization last week.  

ICICI Bank, BHEL, ONGC and Coal India which gained 11-20% were the top gainers for the week.

This was followed by gains in SBI, Tata Steel, Tata Motors, HDFC, Jindal Steel, Bharti Airtel and Cipla which added 5-8%.

Meanwhile, apart from IT names, the ones to close the week in the red were Mahindra & Mahindra, HUL, Hero MotoCorp, Sesa Goa and Tata Power, losing 1-6%.

All the IT majors, TCS, Infosys and Wipro gave off 2-3%.

Global Markets

After falling 3.1% in August, the benchmark Standard & Poor's 500 rebounded by 1.4% in the first week of September. For the week, the Dow Jones Industrial Average rose 0.76% and the Nasdaq Composite gained nearly 2%.

A report on the final day of the week showed payrolls in the US climbed less than projected in August and gains in the prior two months were revised downward, fueling speculation that any Federal Reserve move to taper its stimulus program will be limited. The unemployment rate unexpectedly fell to 7.3% as more people left the labor force.

The week ahead is relatively light by way of economic data, with the biggest scheduled release being retail sales for August, due on Friday. The Reuters consensus forecast calls for an increase of 0.4% from July.