Weekly Review: Markets advance 3%, FMCG rallies

Markets continued the winning streak for the second consecutive week and ended up 2.8% on back of positive global sentiment and continued buying by foreign institutional investors.

The Nifty commenced the week on a positive note, at 5,440 levels and extended the rally which began last Friday. The index broke the medium term resistance of 5,640 mid-week and tested 5,700 levels at the end of week where the rally lost steam as investors assessed the recent gains. The S&P CNX Nifty ended the week on a negative note, down 20 points, at 5627. The benchmark Sensex slipped 83 points, at 18,763. However, markets managed to log gains on weekly basis.

There was revival in interest among Foreign Institutional Investors in Indian equities as they were net buyers of Rs 722 crore on Friday, June 29. The FIIs have bought a total of Rs 2,670 crore in Indian equities according to the Securities and Exchange Board of India.

Nifty closed the week above 5,600 which has rekindled the bullish sentiment and analysts expect Nifty to test the 200-Daily Moving Average-5,740 levels in the coming days. Shrikant Chouhan, Senior Vice President (Technical Research), Kotak Securities said, “The Nifty has formed the continuation of the Hammer pattern, which signifies bullish sentiment to continue.” Hammer is price pattern formed by candlestick on technical charts where the stock trades lower than its opening price, but rallies later in the day and closes above its opening levels which indicates that the bulls are gaining strength. Chouhan said, “If the index ends above 5,770, significant short covering will be seen.”

Going forward markets will take cues from the Monsoon progress and quarterly earnings which will commence mid-July.

This week the Greece government approved the austerity plan and asset sale which re-ignited interest for riskier assets boosting equities across the world. In Asia, Japan’s Nikkei Stock average surged 2%, South Korea's Kospi added 1.7% and China’s Shanghai Composite advanced 0.5% for the week. Going forward markets will take cues from the European Central Bank meeting where it will decide whether to cut Greek banks from funding facility and European Union retail sales.

Among individual stocks, Reliance Industries which has the highest weightage on Sensex, lost 1% on reports that upstream regulator’s house was searched. Cairn India advanced 5% after cabinet gave a conditional nod to Vedanta Resources for acquiring a controlling stake in Cairn India.

From the sectoral indices, BSE FMCG was the top gainer, up 4.2%, as investors bought fundamentally strong shares betting on the domestic consumption theme. The index advanced 164.8 points to 4048 level. Colgate, Marico and Nestle India were up 9.4%, 8.3% and 7.7% each. Frontline stocks like the Hindustan Unilever and ITC, gained 3.9% and 3.4% touching fresh highs.

BSE metal index also added sheen as international metal prices firmed up, the index surged 3.9%, at 15,148. Jindal Saw gained 12% at Rs 161.4, while Hindalco and Welspun Corporation followed at 7.8% and 7.6% each.

BSE Oil& Gas index shed 4.9% at 9038.5. The top gainers include Oil India up 2.1% and BPCL up 1.7%. While the top losers include Petronet LNG down 5.3%, Reliance Industries down 1% and HPCL down 0.3%.

From the broader markets, the BSE Smallcap index gained 3.8% and BSE midcap index advanced 3.5%. From the midcap space Jubilant Life gained 20.3%, Punj Lloyd gained 16.6% and Bajaj India gained 15.5%. Among the smallcap shares Shree Ashtavinayak was up 26.2%, Supreme Infratructure was up 23.67% and Prraneta Industries gained 22.94%.

Top gainers on the Sensex were Hindalco, up 8%, Sterlite Industries gained 6.1% and State Bank of India, up 5.8%. Main losers were Bharti Airtel, down 2%, Reliance Industries down 1% and Wipro down 0.3%.