Weekly Review: The party continues

There seems to be no respite in buying interest. Riding on the back of good advance tax figures and ignoring inflation concerns, the Sensex rose 411 points or 2.4% at 17,578 and the Nifty ended up 125 points at 5262.  In the process, the Sensex and Nifty have risen 9% and 10% respectively in the past six weeks and the Nifty is now within striking distance of the 2-year mark of 5282.  

Advance tax figures for the March quarter have indeed been encouraging. Reliance Industries paid Rs 770 crore as advance tax for the March quarter compared with Rs 365 crore a year ago. Infosys' tax outgo doubled to Rs 250 crore from Rs 125 crore. Tata Consultancy Services paid Rs 178 crore, compared with Rs 53 crore earlier. State-run Union Bank of India paid Rs 185 crore as against Rs 253 crore a year ago. ICICI Bank's Q3 advance tax stood at Rs 350 crore versus Rs 250 crore a year ago. And Asian Paints paid Rs 60 crore, versus Rs 43 crore year earlier.

India's wholesale price index rose 9.8% in February from a year earlier, driven by firm food prices. The numbers were roughly on expected lines, according to the chief economic adviser in the Finance Ministry, Kaushik Basu.

Food inflation fell to 16.3%. Food price index rose 16.30% in the year ended March 6, compared to an annual rise of 17.81% in the previous week. It was the second straight weekly easing of food price inflation. But the fuel price index rose 12.68% in the year to 6 March 2010, compared to an annual rise of 11.38% in the previous week.

Meanwhile, S&P revised its outlook on India from negative to stable, while affirming the 'BBB-' long-term and 'A-3' short-term sovereign credit ratings on the country. S&P also estimated that India's gross domestic product will grow 8% in the year ended March 31, 2011, higher than its earlier forecast.

And after market closing hours on Friday, the Reserve Bank of India hiked the repo and reverse repo rates by 25 basis points. 

Reliance Industries was the top gainer on the Sensex. The index bellweather jumped by Rs 68 or 6.7% to Rs 1089 after reportedly being out of the race for the Canadian firm Value Creation, for which it had placed a $2 billion bid. News reports suggesting an advance tax payment of Rs 770 crore for Q4 March 2010 compared with Rs 365 crore in Q4 March 2009, further aided the positive sentiment surrounding India's largest private sector company by market capitalisation.

Reliance Communications appreciated by Rs 10 or 6.4% at Rs 157 and Hindalco strengthened by Rs 10 or 6.2% at Rs 165. Tata Steel, Jaiprakash Associates and Bharti Airtel added between 4% and 6% each.

On the other hand, auto stocks saw selling pressure as the market participants continued to take profits off the table after the spectacular post-Budget gains. M&M weakened by Rs 63 or 5.5% at Rs 1073 and Maruti Suzuki lost Rs 34 or 2.3% at Rs 1429. Tata Motors was an exception though, gaining by Rs 22 or 2.9% at Rs 783.