Weekly: Sensex zooms 1,000 points; Nifty tops 8,300 on reforms

The Sensex hit a fresh record high of 27,894.32 and the Nifty hit a fresh record high of 8,330.75

Markets gained nearly four per cent in the week to October 31 to hit fresh record highs after encouraging data from the US allayed fears of a global growth slowdown, while the government’s move to ease foreign direct investment (FDI) norms in construction sector boosted sentiments. Indian companies registering a rise in order inflows also signalled the revival of the investment cycle.

For the week ended October 31, both the benchmark indices ended at record closing highs. The 30-share BSE Sensex closed with a gain of 1,015 points, or 3.8 per cent, at 27,865, after hitting a record intra-day high of 27,894.32. The National Stock Exchange 50-share Nifty closed at 8,322, up 308 points, or 3.8 per cent, after touching a record intra-day high of 8,330.75.

Among broader markets, the BSE Midcap and Smallcap indices underperformed their larger counterparts gaining 1.67 per cent and 2.52 per cent, respectively. Foreign institutional investors (FIIs) continued to remain net buyers in Indian equities after they bought equities worth Rs 1,755 crore, as per provisional stock exchange data. This month, mutual funds have been consistent buyers, investing about Rs 5,000 crore in stocks.

Global markets

The US Federal Reserve on Wednesday ended its monthly bond purchase programme and signalled that US economic recovery would remain on track, despite signs of a slowdown in many parts of the global economy. In an unexpected move, the Japanese central bank raised its annual bond buying target to 80 trillion yen ($725 billion) from 60-70 trillion yen. Japan also increased the equity holding limit of foreign shares for its pension funds from 12 per cent to 25 per cent of the portfolio.

Stocks and sectors

BSE Capital Goods and IT indices were the top performers during the week, both gaining by over 5 per cent. Sectors like Auto, Metal, Power, Oil and Gas, Realty and PSU (Public Sector Units) gained between 3 and 5 per cent.

Among the 30 Sensex shares, 27 gained and the remaining shares declined.

GAIL was the top Sensex gainer last week. The stock surged over 10 per cent to Rs 529 after reporting better-than-expected 42 per cent year-on-year (y-o-y) jump in net profit at Rs 1,303 crore for the second quarter ended September 2014.

Pharma shares also witnessed smart gains. Cipla and Sun Pharma gained between four and six per cent. From the FMCG segment, ITC gained by over 1 per cent after posting a standalone net profit of Rs 2,425.16 crore for the second quarter ended September 30, 2014.

HUL lost nearly 3 per cent on a weekly basis. The net profit of the company rose 8.13 per cent to Rs 988.16 crore on 10.83 per cent growth in total income from operations (net) to Rs 7,639.33 crore in Q2 September 2014 over Q2 September 2013.  

Auto stocks rose on buzz of strong sales during the Diwali festive season. Mahindra & Mahindra gained over 3 per cent. Tata Motors rose 3.62 per cent to Rs 535.65 and Maruti Suzuki India surged by almost 5.5 per cent to Rs 3,338.

IT stocks rose on positive US economic data. The US is the biggest outsourcing market for Indian IT firms. Infosys, TCS and HCL Technologies gained between 5 and 6 per cent.

Bharti Airtel was the worst performer during the week. The stock fell 3 per cent to Rs 398.

Week ahead

Second quarter earnings and movement in crude oil prices will dictate the trend in the truncated week ahead with markets closed on November 4 for Muharram and on November 6 for on Guru Nank Jayanti. Some of the major companies that will announce their second quarter earnings include, Jindal Steel, L&T, Ashok Leyland, Jet Airways and Dabur India.

Further, HSBC will release its India’s Manufacturing PMI and Services PMI for October on November 3 and 5, respectively.