Street inches closer to 18000

The markets continued their positive run with the benchmark indices ending the week on strong note with weekly gains of 1.36%. Firm global cues continue to dictate the market movements as foreign institutional flows into India remain strong.

The Sensex closed the week at 17933.14, up 240.52 points after having crossed the 18000 mark mid-week, during intra-day trade, while the Nifty gained 71.25 points to close the week at 5361.75.

The broader indices continue to outperform bellwether indices with significant action being witnessed in mid-caps and small-caps. The BSE Small-cap and BSE Mid-cap indices rose 4.14% and 3.19%, respectively on account of huge buying in these stocks, even as BSE-200 gained 1.58%. “Markets are looking good as liquidity and offshore interest remains positive. Most large-caps are looking overvalued, which is attracting investor’s attention towards medium and small-cap stocks,” said J Moses Harding, head (global markets group) at IndusInd Bank.

The week started on a positive note as markets came closer to hitting 18000 on Monday, before they finally breached the psychological mark on Wednesday for the first time since February 2008. Global markets however got a jolt on Thursday on account of fears related to Greece

The Sensex shed close to 255 points on Thursday before recovering almost all the lost ground on Friday. The statement by European Central Bank (ECB) president that Greece was not in danger of defaulting on its debt and positive retail sales data in the US helped global markets to rebound on Friday. Domestic markets continue to follow global cues even as factors like rising food inflation remain a concern. Foreign investors continued their buying spree (28th straight session of inflows) as they pumped close to Rs 2,350 crore in equities this week.

All sectors closed the week in green except for information technology stocks, which saw some profit-booking on worries of a rising rupee. BSE Realty (up 5.69%), BSE Consumer durables (up 4.54%) and BSE Power (up 3.15%) were the major sectoral gainers this week.

Reliance Infra (up 8.52%) was the top gainer among Nifty stocks followed by IDFC (up 8.21%) and DLF (up 8.21%). Mid-cap banks like Andhra Bank, Federal Bank and IDBI gained close to 6-8%. Among losers, Steel Authority of India (SAIL), which announced its follow-on offering, lost 7.02%.

On the derivatives front, the Nifty April futures closed the week at 5364.90, with 3.15 points premium on the spot index. The Nifty VIX fell to 18.44 on Friday after closing at 19.92 on Thursday. Experts believe markets to continue this good run in April with 5200 acting as strong support.

“We are quite optimistic on markets. Even on Thursday when markets tanked, there was unwinding of long positions rather than shorts build up. Markets, which were rangebound in the last 5-6 months are looking positive and may move towards 5450-5500 in the April series,” said Siddharth Bhamre, fund manager (derivatives) at Angel Broking.

Going ahead, markets would look forward to Q4 earnings a for further upmove, believe experts. There are some important events lined up next week like IIP data and inflation numbers apart from Infosys quarterly results which would influence the market sentiments.