Diwali was extended for the markets last week. Except for a poor day on Monday, it gained on all the four remaining days with the best reserved for Friday. Markets are at an all-time high and it seems there is no stopping. The government has the perseverance, the determination to set things right and all the luck which goes with it.
The profits and losses being calculated at the Bombay Stock Exchange. Pic/Shadab Khan
The BSESENSEX registered its first four digit weekly rally and gained a whopping 1,078.40 points or 4.03 per cent to close at 27,865.63 points. The Nifty gained 326.30 points or 4.08 per cent to close at 8,322.20 points. The broader indices like the BSE100, BSE200 and BSE500 gained 3.99 per cent, 3.88 per cent and 3.80 per cent while the BSEMIDCAP gained 2.70 per cent and BSESMALLCAP up 4.06 per cent.
The top sectoral gainer was BSECAP GOODS which gained 5.77 per cent closely followed by BSEIT at 5.51 per cent. The other big gainer was BSEMETAL at 5.12 per cent. There was no sectoral loser and the one which rose the least was BSEFMCG up a mere 1.51 per cent. In individual stocks Hindalco gained 9.94 per cent closely followed by GAIL at 9.92 per cent.
HDFC gained 7.38 per cent while IDFC gained 7.35 per cent. In the IT pack Tech Mahindra gained 7.49 per cent while Infosys gained 6.75 per cent. On the losing side, there were not too many stocks what with a 1000 point rally and markets at new life time highs, but the few losers included Bharti Airtel down 2.71 per cent followed by Hind Unilever 2.51 per cent and Cairn India 1.33 per cent.
The spate of good news was from all over the country and world. The US FED finished the tapering under QE3 but in a surprise and completely unexpected move Bank of Japan announced a larger bond buying program.
What triggered the Friday global rally was the fact that they allowed pension funds to double their holding in foreign shares from the 12 per cent allowed earlier to 25 per cent.
In India, the government cut prices of diesel a second time since they were deregulated. This time around too the price cut was steep and petrol prices were cut as well. With crude oil prices at $ 80, the subsidy bill would reduce significantly.
The good news continued with gold prices falling and going below the 26,000 mark in India. Silver prices too fell and this fall led to speculation that a duty cut on gold is in the offing. As it is, the interest rate cut clamour has begun with the finance minister too asking for one with consumer inflation expected to fall significantly this month.
FII’s returned to buying equities after being sellers in the greater part of October with net purchases of Rs 3,962 crores for the week and R 740 crores for the month. Domestic institutions too were buyers with purchases of Rs 667 crores for the week and R 5,047 crores for the month.
The Indian rupee lost eight paisa to close at Rs 61.36. October series futures expired with bulls fully in control and the series gained 257.35 points or 3.25 per cent to close at 8,169.20 points.
The Dow Jones too raced to yet another record high gaining 585.11 points or 3.48 per cent to close at 17,390.52 points. Diwali is celebrated in India and some countries where we have large Indian population like Singapore. But this time it appears global markets are celebrating Diwali.
DLF controversy continues and now with a BJP government sworn in Haryana and at the centre things could get difficult for Robert Vadra. The government is committed to investigating and bringing to light the entire deal.
While controversy is good for traders in a share as the volatility increases, it is not necessarily good for the investor as he is unable to react to sharp price movements on daily rumours and news flow. It is therefore suggested that investors should stay away from such counters until the controversy is sorted out or some clarity emerges.
The government has announced austerity measures and cut expenditure by 10 per cent. This is good for the fiscal deficit. The burden is on subsidies. Fuel is set to fall drastically, which will help matters.
Arun Kejriwal is founder of the Mumbai-based advisory firm Kejriwal Research & Investment Services Pvt Ltd. Readers are invited to read more about these and other issues on his website http://ak57.in
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