Weekly: Markets retain winning streak on Fed outcome

Dr Reddy's , Hero MotoCorp, TCS and Maruti among the top gainers

Benchmark indices eked out marginal gains for the week, as the markets heaved a sigh of relief on the US Federal Reserve decision to continue with its low-interest rate regime for a ‘considerable time’.

Also, Scotland's decision to stay in the United Kingdom, spurning independence in a historic referendum that worried both the allies and investors, helped the investor sentiment.

The major dampners for the week were sluggish July domestic industrial growth and weaker-than-expected economic data from China raising concerns over slowdown among the world's largest economies.

In the week to September 19, the 30-share Sensex ended up 0.1 per cent or 29 points at 27,090 and the 50-share Nifty added 0.2 per cent or 16 points to close at 8,121.

The weakness in the broader markets was prominent where a sell-off in the initial part of the week nearly wiped off the gains in the last two days of trade. The Midcap Index was down over one per cent while the Smallcap Index inched higher by 0.2 per cent.

Sectors and stocks
Defensives were the clear favourites this week as volatility made a comeback. IT and health care indices ended as the top sectoral gainers up 2.3 per cent and 1.4 per cent, respectively. Realty and auto indices up 0.9 per cent were the only other sectors that ended positive.

IT shares gained on hopes that they were better placed to weather any Fed-related volatility. IT heavyweights like TCS, Infosys, HCL Technologies, Tech Mahindra and Wipro added 1-4 per cent.

The movers in the pharma space were Dr Reddy’s, Lupin and Cipla up 2-9 per cent. Real estate investment trusts (REITs) kept the realty scrips afloat as scrips like Unitech, Indiabulls Real Estate and Phoenix Mill gained 4-10 per cent.

Auto counters gained as Hero MotoCorp and Maruti Suzuki drove higher on reaction to counter specific news.

Hero MotoCorp gained seven per cent after the company said it would set up an ultra-modern manufacturing facility with a capacity to produce 1.8 million units annually in Andhra Pradesh. Maruti Suzuki ended up four per cent after the company announced that its Manesar facility has crossed the 2.5-million production milestone this month. Baja Auto and Tata Motors up 2.7 per cent and 0.5 per cent were the other gainers in the auto space.

Meanwhile, Oil & Gas, Metal, PSU, Capital Goods and Consumer Durables indices down 1-3 per cent were the top sectoral losers.

Oil & Gas scrips dropped almost in tandem with the drop in crude oil prices. IOC, ONGC, Oil India, GAIL and RIL were down 2-7 per cent and were among the top losers among Nifty stocks.

Some of the other prominent losers for the week were Coal India, L&T, HUL, Hindalco, Sesa Sterlite, Axis Bank and SBI which declined by 2-4 per cent.

The week ahead
Markets are likely to remain volatile early next week as roll-over positions to the October series will be closely watched. The September derivative contracts will expire on Thursday, September 25, 2014.

Market participants will also keep track of foreign fund inflows, On the international front, ECB President Mario Draghi's speech on European economy and US’s annualised Q2 GDP (gross domestic product) data will help shape the global cues.