Weekly review: Market correct marginally amid capital inflows

Indian bourses underwent a a downward correction after the key indices Sensex and Nifty hit fresh 16-month highs amid hints of caution about stretched valuations and fears of liquidity shortage.

In the week to September 26, the Bombay Stock Exchange 30-share barometer ended at 16,693.00, a net loss of 48.30 points or 0.29 per cent from its last weekend's close.

The 50-share Nifty of the National Stock Exchange also finished the week lower by 17.10 points or 0.34 per cent to 4,958.95 from its previous weekend's close of 4,976.05.

The bellwether Sensex had virtually touched 17K mark while the Nifty crossed the 5,000 psychological level on September 22 on sustained capital inflows.

Though the rollover to October series was quiet healthy and the market technically very strong, investors preferred to be cautious due to stretched valuations.

Continued offers of equity and equity related instruments by companies ro raise funds also cause concerns that this will suck liquidity from the secondary market.

The market, however, was well support by growing optimism about second quarter corporate earnings prompted by positive growth in advance corporate tax payments in September quarter, an indication of revival of economic activity.

Reports that the Sebi was planning to further relax norms for governing foreign portfolio investment in country also seen as a positive factor for the market.

Foreign Institutional Investors were heavy buyers in the market during the week. They pumped in about Rs 4,397 crore including provisional figure for September 24, in the week. They have injected Rs 14,630 crore between September 7 and 24.

Healthcare index, however, surged by 7.11 per cent as pharma stocks stole the limelight in the concluding day of the week. This was credited to a report prepared by the Federation of Indian Chambers of Commerce and Industry that the Indian pharmaceutical market will treble to USD 20 billion in next six to seven years.

Other sectorial indices such as the BSE FMCG, Bankex and Oil & Gas gained by about 2.0 to 1.0 per cent.

The trading volume on BSE and NSE fell sharply to Rs 23,735 crore and Rs 72,487 crore from its last week turnover of Rs 32,976.04 crore and Rs 93,410.33 crore, respectively.

Sun Pharma gained 9.15 per cent, HDFC 8.60 per cent, HDFC Bank 5.58 per cent and ITC 3.23 per cent over the week.

However, Jaiprakash Associates was down 7.59 per cent, Bharti Airtel 6.38 per cent, Infosys Tech 5.01 per cent, Mah & Mah 4.02 per cent and Tata Steel 3.77 per cent from last weekend's close.

The BSE Metal Index dropped by 3.87 per cent and the BSE IT index by 3.13 per cent.