Markets end the first week of 2012 in the green. India's benchmark share indices ended nearly 3% up in the week to January 7, led by banks and capital goods shares. While Sensex gained 394 pts or 2.6% to end at 15,849, Nifty was up 123 pts or 2.7% to end at 4,747.
The biggest gainers from the CNX 500 were TSC India, NFL, RCF and Tata Metallics. The biggest losers were Sterling Biotech, Hero MotoCorp, TVS Motors and Baja Auto.
Key Events
Global Markets
Euro region inflation slowed for the first time in five months in December, giving the European Central Bank room to lower borrowing costs further as the economy edges toward a recession. The inflation rate in the 17-nation euro area fell to 2.8% from 3% in November as per the European Union's statistics office report.
Singapore's economy shrank for the second time in three quarters as manufacturing eased, increasing pressure on policy makers to spur growth as they forecast slower expansion this year. Gross domestic product fell an annualized 4.9% in the fourth quarter of 2011 from the previous three months, when it climbed a revised 1.5%.
China's December PMI data ceased its sliding trend for two consecutive months and ended 2011 with a slight rebound. The Purchasing Managers' Index (PMI), a preliminary readout of the country's manufacturing activity, rebounded to 50.3% in December, indicating a stabler slowing trend for the country's economic growth.
Indian Markets
Private equity (PE) and venture capital (VC) investments in India rose 41% in 2011 over the previous year, the highest since 2007 as a sluggish capital market and costlier debt led Indian companies to approach these investors for fresh funds.
India's food price index declined for the first time in nearly six years as costs of pulses and vegetables fell, raising hopes that December's headline inflation rate could drop below 9% for the first time in more than a year. The fuel inflation accelerated to 14.6%, government data released during the week showed.
Foreign institutional investors (FIIs) bought shares worth Rs 381.42 crore on 5th January 2012, as per provisional data from the stock exchanges. FII inflow totaled Rs 775.78 crore in three trading sessions on 3 to 5 January 2012, as per provisional data from the stock exchanges.
India raised iron ore export duties to 30% from 20% as it seeks to conserve supplies for the domestic steel industry. The new rate of 30% is applicable on both fine and lumps.
Key Sectoral Movement
Except BSE FMCG all other sectoral indices ended in the green. The top gainers were Capital Goods, PSU, Bankex and Metals, which rose by 6.2%, 6.2%, 6% and 5.4% respectively.
Outlook of the week
The focus for the next few weeks would be the Q3 results and guidance from the company managements on outlook for the remaining part of the year and for the next year. The market has been trading in a tight range of 4,700-4,800 on the Nifty. A breakout either way would decide future course of the market.
Source- HDFC Security
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