Indices bounce back during the shortened week

The week, which saw a series of holidays, gave the markets only two complete trading sessions. With the muhurat trading on Tuesday, the markets started another year on a positive note as global markets continued their recovery from the sharp decline in October.

The last year on the Hindu calendar was the best ever in the history of the Indian stocks markets, with the Sensex gaining close to 2000 points. The situation would have been a lot better but for the October correction which saw the Sensex shedding close to 1000 points. FII inflows into the Indian market had hit a record high of $8.5 billion during January to October, which fuelled the rally. Even after the subsequent outflows, the figure is substantially higher than the same period the previous year.

The week started on a very positive note as the frontline indices surged on Monday to close with gains of well over 2 per cent each. The Sensex added more than 200 points and touched the 7900 mark once again, though it could not manage to close above that level.

The momentum continued during the short muhurat trading session on Tuesday evening and the Sensex managed to go past the 8000 mark in opening trades. The gains could not be sustained as traders booked profits later in the session and the indices closed the day with gains of more than half a per cent each.

After a weak morning session, the indices bounced back on Wednesday as most frontline stocks saw good buying. Cement, metal and technology were the best performing sectors. The indices added well over a per cent each as the Sensex closed much above 8000.

The Sensex added 387 points or 5 per cent during the week and the Nifty went up by 103 points or close to 4.5 per cent over the week.

Mid-caps also managed to bounce back though the gains were relatively lower than the frontline stocks. The mid-cap index recovered all of last Friday's losses with a 2 per cent rally on Monday. After remaining weak in the early pert of the session on Wednesday, they rallied to close the day with gains of more than half a per cent. The CNX Mid-Cap 100 index gained 129 points or close to 4 per cent during the week.

Domestic economic and regulatory action

  • Wholesale price inflation for the week ended 22 October declined to 4.49 per cent from 4.71 per cent for the previous week. The drop in inflation was attributed to lower prices of food and energy. Prices of manufactured goods as well as base metals increased during the week