Weekly Market Wrap..Nifty rallying further to end with gains for the fifth consecutive week.

The week gone by saw the Nifty rallying further to end with gains for the fifth consecutive week. The Nifty gained 2.33% W-o-W. Market breadth was positive in four out of the five trading sessions of the week. The biggest gainers from the CNX 500 were STC India, KSK, Aban, Tata Global and Prestige. The biggest losers were Varun Shipping, Sterling Bio, FDC and Tata Coffee.

Indian Markets

Equity benchmarks maintained their upward momentum during the week, rising 2% over last Friday. A glance at the events and developments that ruled sentiment during the week.

• December exports up 6.7% to $25 billion, trade deficit (exports-minus imports) for April-December soars to $133 billion, and seen touching $160 billion by March.

• Core sector growth in December at a tepid 3.1%, indicating that the recovery in the November index of industrial production may have been an aberration.

• Finance ministry advisor Kaushik Basu sees inflation for FY12 between 6.5-6.8%, says economy is turning around.

• Rupee continues to rise against the dollar, hits three month high of 48.68, driven by strong FII inflows, weakness in dollar relative to other economies.

• Growth in household savings declines to 13.7% in 2010-11, compared to 21% the previous fiscal, mainly due to high inflation.

• Purchasing Managers Index for manufacturing hits 7-month high of 57.5 in January.

• Liquidity pressure persists despite cut in cash reserve ratio, RBI resorts to open market operations to infuse liquity.

Policy Changes:

The Supreme Court on Friday cancelled 122 2G telecom licences issued after January 2008, saying that norms were flouted while awarding them to companies. Uninor, Loop DB Etisalat, Sistema Shyam among worst affected. No clarity yet on refund on licence fee.  The spectrum available as a result of the cancellation of the licences, will be auctioned, earning much needed revenues to the cash-strapped government.

The government revised the economic growth rate for 2010-11 financial year slightly down to 8.4% from the earlier estimate of 8.5%.

Exports grew by merely 6.7% to $25 billion in December 2011 compared to the same month last year due to demand slowdown in the western markets of the US and Europe.

Key Sectoral Movement

All the sectoral indices except Consumer Durables and Capital Goods ended in the green, which lost 2.8% and 1% respectively. The top gainers were Realty, Auto, IT and Bankex, which ended higher by 4.8%, 3.7%, 3.3% and 3.2% respectively.

Outlook of the week

With the markets moving up further for the fourth consecutive session, the underlying trend continues to remain up. Immediate upside targets for the Nifty in the coming week are at 5360-5380. The current short term uptrend would reverse with a Nifty close under 5076.

Sources-moneycontrol, hdfcsec