Markets turn volatile during the week as the indices record new highs
03 December 2005
The indices opened the week on a strong note, continuing the momentum from previous weeks. The Sensex crossed the 9000 mark for the first time ever on Monday and the Nifty went past the 2700 mark, as the frontline stocks received good buying interest.
Markets corrected on Tuesday, in line with the trend across most global markets. Many frontline stocks in the engineering, auto, technology and FMCG sectors declined on profit booking.
The volatility started on Wednesday after the indices recorded new lifetime highs in early trades. The indices declined substantially later in the day with the Sensex losing more than 260 points from the highs of the day. Both frontline indices closed with losses of nearly 2 per cent each.
The recovery on Thursday was equally fast as both Sensex and Nifty regained all their losses from the previous day. After some volatility in early trades, the indices surged ahead in the afternoon and closed with gains of nearly 2 per cent each. The momentum continued during early part of Friday as both indices went on to record new lifetime highs. However, they gave up almost all of their gains in an afternoon sell-off.
The Sensex added 73 points or 0.82 per cent during the week and the Nifty went up by 15 points or 0.56 per cent over the week.
Mid-caps were more subdued during the week as trading interest is still lacking. However, less volatility when compared to the frontline stocks helped the mid-cap index to outperform the main indices during the week. The movement of the mid-cap index was more or less in line with the trend in larger indices, but they escaped the sharp rallies and declines to some extent. The CNX Mid-Cap 100 index gained 55 points or 1.43 per cent during the week.
Domestic economic and regulatory action
- Second quarter GDP growth has come in at a very robust 8 per cent as against 6.7 per cent during the same quarter of the previous year. Together with a first quarter growth of 8.1 per cent, the growth rates for the first half of the current financial year is comfortably above 8 per cent as compared to around 7 per cent during the same period of previous year.
