Sensex ends in green for second week

However,it recovered the next day on news of that the Swiss National Bank (SNB) will set a floor price for the euro/ swiss franc exchange rate to control the rising franc. This development boosted European stocks and had a positive impact on the Indian markets.

The Sensex remained in positive terrain till Thursday and crossed 17,000-mark to hit a four-week high of 17,211.80 on Friday morning on across-the-spectrum buying on fall in food inflation amid sustained portfolio investments.

However,selling on the last day of the week following weak US economic data and US Federal Reserve Chairman’s failure to give any indications of a new stimulus package to boost the world’s largest economy,weighed on global markets.

US President Barack Obama’s move to provide a USD 447- billion jobs package failed to infuse confidence in global investors as they resorted to selling amid recession concerns.

As a result,the Sensex fell back sharply to settle the week at 16,866.97,still showing a rise of 45.51 points,or 0.27 per cent. Last week,it had zoomed by 972.63 points or 6.14 per cent.

The broad-based NSE 50-issue Nifty moved in a range of 5,169.25 and 4,942.90 before concluding the week at 5,059.45,a net rise of 19.45 points,or 0.39 per cent.

Small-cap and mid-cap counters,however,attracted heavy buying interest,indicating return of retail investors.

As a result,the BSE-Small-cap (up 2.39 pct) and BSE-Mid-cap (up 1.75 pct) indices outperformed the Sensex.

Foreign Institutional Investors (FIIs) also turned net sellers as they pulled out Rs 427.67 crore on Friday as per provisional data,after injecting Rs 1,184.40 crore on the first four days of the week.

Food inflation declined to a single digit to 9.55 per cent for the week ended August 27 from 10.5 per cent in the last week,but it is still higher than RBI’s comfort level.

Globally,Asian markets ended the week in negative zone and same was the trend in US and European stocks. On Friday,after closure of local markets,European and US markets settled deep in the red,signalling weak opening on Monday on Indian bourses.

However,operators and investors are cautious ahead of a slew of micro and macro data and Reserve Bank of India’s mid-quarter monetary policy review on September 16.

Investors are also eyeing the second quarter corporate advance tax payment data due next weekend,which may provide direction to the market.

Metal as well as IT stocks suffered a setback on a likely slowdown in global economy. IT companies,however,might get support following weakness in the rupee value against US dollar,while firms with high import will have to bear the burden.

Top heavyweight RIL was in good demand in the week as investors were encouraged by the British firm BP Plc’s comment that it is confident of raising natural gas production from eastern KG-D6 block in two years’ time.

But it suffered a setback on Friday after Government auditor Comptroller and Auditor General (CAG) submitted a report over the private firm’s violations in the hydrocarbon Production Sharing Contracts (PSC) with the Government.

The RIL share ended the week up by 2.44 per cent,despite a fall of 2.62 per cent on Friday.

Among sectoral indices,BSE-CD flared up by 5.01 per cent,BSE-capital by 3.38 per cent,BSE-Auto by 2.12 per cent and Bankex rose by 1.35 per cent.

However,BSE-Teck dropped by 1.06 per cent,BSE-Metal by 0.99 per cent and BSE-IT lost 0.91 per cent.

Major gainers from the Sensex pack were Jaiprakash Asso (9.45 pct),Hero MotoCorp (7.13 pct),L&T (5.00 pct),HUL (4.04 pct),M&M (3.28 pct),Jindal steel (2.80 pct),Maruti Suzuki (2.03 pct),TCS (1.39 pct) and ICICI Bank (1.03 pct).

However,DLF dropped by 4.03 pct,Bharti Airtel by 2.03 pct,Infosys Tech by 1.91 pct,Coal Ind by 1.53 pct,SBI by 1.95 pct,Sun Pharma by 4.44 pct,Tata Power by 1.91 pct,Hindalco by 2.56 pct,ITC by 2.70 pct,NTPC by 2.09 pct,Sterlite Ind by 2.24 pct and Tata Steel shed 2.36 pct.

Total turnover at BSE and NSE was at Rs 14,222.21 crore and Rs 60,467.50 crore,respectively.

Forex: The Indian rupee,after taking a respite last week,continued its south-bound journey and plunged by 77 paise to end at one-year low of 46.56/57 against the Greenback during the week under review following continued dollar demand from importers and some banks amid strong dollar overseas.

However,continued capital inflows amid positive equities failed to stem the rupee fall.

At the Interbank Foreign Exchange (Forex) market,the local currency commenced the week lower at 45.96/97 and moved in a range of 45.8450 and 46.5850 before settling at 46.56/57 a dollar from last weekend’s close of 45.79/80,a net fall of 1.68 pct. Last week,it had risen by 36 paise or 0.78 pct.

Previously,it had finished at 46.63/64 on September 8,2010.

Sustained dollar buying by importers and some banks on the back of firming dollar overseas and also expectations of further rise,mainly put pressure on the rupee.

Mr. Pramit Brahmbhatt,CEO,Alpari Financial Services (India) said,”Rupee depreciated this week by over one and half per cent,taking cues from global markets where Euro & GBP traded weak against the greenback,which helped dollar to move upwards and trade at highest level in the year.”

“The U.S. dollar index which measures the greenback’s performance against six currencies rose over one and half per cent during the week taking cues from weak EURO & GBP which continued to trade weak against the dollar mainly after the positive speech from Ben Bernanke (Federal Reserve Chairman),” he added.

The Indian benchmark Sensex closed the week up by 45.51 points or 0.27 per cent,erasing most of its mid-week gains on Friday’s heavy sell-off.