Weekly Review: Markets gain on rate cut hopes

March inflation, falling commodity prices and corporate results were key factors

Indices ended the week on a higher note with Nifty hitting a one-month high on sustained buying interest. A slide in March inflation nos, persistent decline in global commodity prices and precious metals led to building up of rate cut hopes thus boosting the overall sentiments in the markets. Sensex crossed 19,000 mark while Nifty moved above 5750 levels decisively. Among the sectors, Banks hogged the limelight on rate cut hopes.

The BSE Sensex jumped 774 points or 4.2% to 19,016, its highest closing level since 2 April 2013. The Nifty surged 255 points or 4.6% to 5,783, its highest closing level since 18 March 2013.

On Monday, markets opened weak ahead of March inflation data with gold loan companies sinking on gold prices sinking more than 5%. However, buying support from Oil & Gas stocks saw Indices recouping losses. Better than expected March Inflation numbers, which came it at lowest in 40 months, lifted sentiments with rate sensitives like Banks, Auto and Infrastructure counters seeing buying interest. Sensex closed above 18,350 mark.

On Tuesday, Indices firmed up after making a cautious opening tracking subdued global cues. Gold and Silver prices extended fall on worries over slowing growth in China. Oil marketing companies traded higher following reports of petrol price being cut by Re 1. Tata Power advanced after CERC allowed the firm to raise power tariffs. Buoyant activity continued propelling Indices to day's high. Sensex surged nearly 400 pts to end at 18745.

On Wednesday, markets turned flat after opening steady post firm global cues. HCL Tech jumped post strong Q3 nos while gold loan cos. Profit booking crept in the afternoon session dragging Nifty below 5700 while Rupee hit a fresh seven-week high. Volatile activity prevailed in the final hour with ITC hitting life-time high while Tech stocks wilted under selling pressure. Indices ended marginally lower with Sensex closing at 18731, shedding 14 pts.

On Thursday, Indices began flat but soon gained ground led by Banks and OMCs. Indices turned buoyant led by good set of March export numbers while Mining stocks surged following SC permitting mining in Karnataka. Firm European markets propelled Indices near day's high. Sensex zoomed 285 pts to end at 19016 levels.

On Friday, markets were closed on account of RaM Navami.

A fall in vegetable prices, among other factors, made Wholesale Price Index (WPI)-based inflation hit a 40-month low of 5.96 per cent in March, compared with 6.84 per cent in February, much lower than the Reserve Bank of India (RBI)'s projection of 6.8 per cent. The latest decline has led to demands from various quarters for a cut in the policy rate by RBI in its May monetary policy to perk the growth rate, which fell to an estimated decadal-low of five per cent in 2012-13.

The gold price decline in the past week, the steepest in 30 years, has tarnished gold's appeal for the portfolio investors whose money had fuelled a 12-year bull run. As investors rush out, consumers that were priced out of the market for years have rushed in.

Market heavyweight - RIL’s net sales declined by 1.2% year-on-year (yoy) to Rs 84,198 crore in March quarter mainly due to lower oil and gas segment sales. Analyst on an average expected revenues of Rs 93,058 crore.

IT major - TCS' net profit jumped 33.6% to Rs 13917 crore on 28.8% growth in revenue to Rs 62989 crore in the year ended 31 March 2013 (FY 2013) over the year ended 31 March 2012 (FY 2012). The company clocked volume growth of 16.8% in FY 2013 over FY 2012. TCS said there was balanced growth across markets and industries in FY 2013. All industry verticals grew in double digits in FY 2013, it said. TCS' full service capabilities continue to be leveraged by customers with new service lines growing at a fast pace. The infrastructure services segment grew 47%, business process outsourcing grew 46% while assurance services, enterprise solutions and global consulting grew by 33%, 25% and 52% respectively, TCS said. The stock declined 4% this week to end at Rs 1450.

Wipro was down 3.8%, followed by Cipla, Coal India and Tata POwer.

Bank stocks galloped on expectations that the Reserve Bank of India will cut its key policy rate viz. the repo rate to boost growth amid slowing wholesale price inflation. ICICI Bank advanced 7.44%. ICICI Bank announces Q4 results on 26 April 2013. HDFC Bank rose 4.57%. HDFC Bank announces Q4 results on 23 April 2013.

L&T jumped 8.33%. The company is close to winning a $800-million contract from Saudi Aramco for building its upstream processing facilities for the Midyan field, as well as a 135-kilometre pipeline to transport gas to the power plant in Saudi Arabia.

Mahindra & Mahindra (M&M) surged 9.55%. M&M on Tuesday said Mahindra USA (MUSA), a part of Mahindra Group, closed the fiscal year 2013 with record billings and record retail sales, gaining over 2% points, delivering its highest ever market share in the US.