Marginal correction in stock market amid capital inflows
September 26, 2009
In the week to 26th September, the Bombay Stock Exchange 30-share barometer ended at 16,693, a net loss of 48 points or 0.3% from its last weekend's close. The 50-share Nifty of the National Stock Exchange also finished the week lower by 17 points or 0.3% to 4,958 from its previous weekend's close of 4,976.
The bellwether Sensex had virtually touched 17,000 mark while the Nifty crossed the 5,000 psychological level on 22nd September on sustained capital inflows.
Though the rollover to October series was quiet healthy and the market technically very strong, investors preferred to be cautious due to stretched valuations. Continued offers of equity and equity related instruments by companies to raise funds also cause concerns that this will suck liquidity from the secondary market.
The market, however, was well support by growing optimism about second quarter corporate earnings prompted by positive growth in advance corporate tax payments in September quarter, an indication of revival of economic activity.
Reports that the SEBI planning to further relax norms for governing foreign portfolio investment in the country was also seen as a positive factor for the market.
Foreign Institutional Investors were heavy buyers in the market during the week. They pumped in about Rs44 billion including provisional figure for 24th September in the week. They have injected Rs146.3 billion between 7th and 24th September.
Healthcare index, however, surged by 7.1% as pharma stocks stole the limelight in the concluding day of the week. This was credited to a report prepared by the Federation of Indian Chambers of Commerce and Industry that the Indian pharmaceutical market will treble to $20 billion in next six to seven years.
Other sectoral indices such as the BSE FMCG, Bankex and Oil & Gas gained by about 2% to 1%. The BSE Metal Index dropped by 3.87% and the BSE IT index by 3.13%.
The trading volume on BSE and NSE fell sharply to Rs237.4 billion and Rs724.9 billion from its last week turnover of Rs329.8 billion and Rs934.1 billion, respectively.
Sun Pharma gained 9.2%, HDFC 8.6%, HDFC Bank 5.6% and ITC 3.2% over the week. However, Jaiprakash Associates was down 7.6%, Bharti Airtel 6.4%, Infosys Tech 5.0%, Mahindra & Mahindra 4.0% and Tata Steel 3.8% from last weekend's close.