Sensex gains modestly for the week

Frontline Indian indexes were fairly volatile this week, though markets remained closed on two days. The sustained up trend across global markets, lower crude oil prices and the decline in inflation acted as positive triggers. However, large caps saw some profit booking on the last day of trading.

On Monday, the indexes recovered from an early decline and ended on a mixed note. ICICI Bank tumbled after the results announcement and on plans to raise as much as $5 billion in additional capital this financial year. HLL was the other major loser that day, but gains in technology stocks helped the indexes to pare the losses

Positive global cues helped the Indian indexes to rally ahead on Thursday, after two trading holidays. Reliance Industries gained substantially and was ably supported by other oil & gas and petrochemical stocks. Select banking, auto and metal stocks also gained ground

Though most global markets extended their gains on Friday, Indian indexes declined after a firm start. Reliance Industries corrected after the previous day's gains though ONGC provided some support to the indexes. Select banking, engineering and telecom stocks also lost ground.

Sensex gained a modest 26 points, or 0.19 per cent, during the week while the Nifty did better and closed with gains of 33 points or 0.8 per cent for the week.

Mid-caps and small-caps performed far better than the large caps this week. They gained considerably on Monday and Thursday and resisted the decline on Friday. CNX Mid-Cap 100 index closed the week with gains of 154 points or 2.97 per cent for the week.

Domestic economic and regulatory action

• Wholesale price inflation for the week ended 21 April declined to 5.77 per cent from 6.09 per cent for the previous week. Prices of primary food articles declined further as expected, as fresh harvest reach the market. However, part of the decline was also due to high base effect as headline inflation had gone up during the same week of previous year. Prices of non-food items continued to rise, mostly because of higher metal prices, though prices of manufactured items declined marginally.

US markets, global economy and oil

• US markets extended their gains this week on talks of large corporate acquisitions. The Dow scaled new lifetime highs while the S&P 500 index crossed 1500 for the first time since 2000. The unsolicited bid by News Corp for Dow Jones was followed the announcement of a bid for Reuters by an unnamed bidder. Microsoft is also reportedly in negotiations to acquire Yahoo in what would be the biggest such deal in the internet space. Economic data released during the week showed sustained productivity gains while lower than expected employment additions helped ease fears of inflation.
  
  The Dow gained 1.1 per cent for the week, taking total gains over last three weeks to over 5 per cent, while S&P 500 gained 0.8 per cent. Technology stocks underperformed this week and the NASDAQ ended with gains of 0.6 per cent for the week.
  
  
• Crude oil prices declined this week as concerns of political unrest in Nigeria receded and allayed fears of supply disruptions. Fresh efforts by the governments of Ecuador and Venezuela to take complete control of the oil industry did not have much of an impact on prices this week. Announcement of a major oil discovery in China, reportedly the biggest oil find in more than three decades, brought down prices further. Near month futures on the NYMEX lost $4.5 per barrel for the week and settled at $61.93 per barrel on Friday.
  

Thomas White Global Research, part of the Thomas White International Group, publishes capital market research for global institutions and investment banks.

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