Weekly Report: Markets have a stupendous rally

The benchmark indices had a spectacular rally on the first four trading sessions of the week, thanks to the encouraging macro-economic data back home and positive cues from the global market front. The Sensex ended at 19420, stronger by 604 points or 3.2% and the Nifty settled with gains of 172 points or 3% at 5,826. The BSE midcap index ended at 6,982, higher by 261 points or 3.8% and the smallcap index ended at 8,358, up 356 points or 4.4%.

Considering that the rally was only a continuation of last week's uptrend and halted only on Friday after continuing for eight trading sessions unabated and heralding gains of 9%, this should qualify as one of the memorable runs in recent memory and so it was. The markets posted their highest returns in 21 months, during the 8-day period, to sign off FY2011 in style before profit-booking in RIL and banking stocks snapped the uptrend on the first trading day of the new year.

Meanwhile, there was a lot of cheer on the macro-economic front. India's exports grew by an impressive 50% in February, crossing the $200 billion mark during the first eleven months of 2010-11, on the back of rising demand from the US and other markets. Exports went up by 49.7% year-on-year during February to $23.5 billion, taking the April-February 2010-11 figure to $208.2 billion, an increase of 31.4% over the year-ago period and past the yearly target of $200 billion.

There was an easing in food inflation too. India's food price index rose 9.5% and fuel price index climbed 13.1% in the year to March 19. In the previous week, annual food and fuel inflation had stood at 10.05% and 12.79% respectively. The primary articles price index was up 12.98%, compared with an annual rise of 13.53% a week earlier.

The auto companies also announced good sales numbers for the month of March. The country's largest car-maker Maruti Suzuki India reported a 28.20% jump in total sales for March to 1,21,952 units from 95,123 units in the same month last year. For entire 2010-11 financial year, the company's sales soared by 24.81% to 12,71,005 units from 10,18,365 units in the previous fiscal. Two-wheeler maker Suzuki Motorcycle India saw a 25.94% growth in March sales to 27,361 units from 21,725 units in the same month last year. And the Chennai-based TVS Motor Company witnessed a 28.16% jump in sales for March to 1,91,208 units from 1,49,194 units in the corresponding month of 2010. For entire FY11, the company's sales jumped by 33.17% to 20,46,668 units from 15,36,919 units in the previous fiscal.

And strong rollovers were seen during the March derivatives expiry on Thursday. The marketwide rollovers stood at 81%, while rollovers in Nifty futures was at 71% and Bank Nifty futures rollovers were at 76%.

The global markets were also in a bullish gear. Blue chips in the US surged to an early 3-year high on Friday as encouraging jobs growth kicked the second quarter off to a strong start. Dow Jones industrial average hit its highest level since June 2008 after the government reported a second straight month of robust job gains in March.

The realty index ended at 2397, stronger by 7.1%, auto ended at 9,355, higher by 5.7% and banking ended at 13,189, up 2%. In the midcap space, Dewan Housing ended at Rs 271, stronger by 21%, BASF India ended at Rs 621, higher by 19% and Sterlite Technologies ended at Rs 59, up 18%. IL&FS Transport, Kirloskar Brothers and Kalpatru Power were the other significant gainers. In the smallcap space, AP Power ended at Rs 311, stronger by 79%, Atlanta ended at Rs 117, higher by 31% and Asian Hotels ended at Rs 308, up 31%.

In the realty space, DB Realty ended at Rs 116, stronger by 20%, HDIL ended at Rs 181, higher by 10% and DLF ended at Rs 271, up 9%. Orbit Corporation, Indiabulls Real Estate and Mahindra Lifestyles were the other significant gainers.

In the auto space, Maruti ended at Rs 1274, stronger by 7.8%, Hero Honda ended at Rs 1602, higher by 7.5% and Baja Auto ended at Rs 1559, up 5.7%. M&M and Tata Motors gained around 5% each at Rs 710 and Rs 1242 respectively.

And in the banking space, HDFC Bank and Axis Bank ended stronger by 3.1% each at Rs 2333 and Rs 1409 respectively. In the midcap banking space, Federal Bank ended at Rs 418, stronger by 8.5%, Bank of India ended at Rs 479, higher by 5.2% and Indusind Bank ended at Rs 265, up 5%.