Weekly round-up: Markets consolidate as global concerns remain

After touching all-time highs in November, stock markets consolidated past gains in the week ended December 5. The broader market represented by the Bombay Stock Exchange (BSE) Sensex ended the week with a 100-point loss at 28,458 while the Nifty fell 25 points to end at 8,538. Major sectoral gainers during the week were the FMCG Index, which rose 6%, while the media index rose 2%. IT and Healthcare indices lost 1% each during the week.

"Mid- and small-cap stocks were major gainers as risk appetite made a comeback. The RBI's dovish statements also gave a fillip to the sentiment," says Dipen Shah, head, private client group research, Kotak Securities.

This week's most important event was the Reserve Bank of India (RBI) policy, which maintained a status quo on interest rates. The RBI hinted at cutting rates in the early part of the next calendar year provided inflation falls. It added that cutting rates at the moment would be premature as it wants to see if the fall in crude oil and food prices is durable.

The week also saw the government kick off disinvestment with SAIL's offer for sale. The offer was subscribed 2.58 times in the retail category and 1.96 times in the general category.

"Among other major news, India's low-cost airline SpiceJet tumbled 13.78% on Friday on the BSE due to the Airport Authority of India's declaration that it is withdrawing its credit limit relating to user fee," says Rakesh Goyal, senior vice president, Bonanza Portfolio.

Among global markets, Japan's Nikkei 225 rose 0.94% after news that Japan's coalition is set to win the December elections. It was supported by a lower yen. Chinese stocks, too, soared to multi-year highs amid the steep rise in shares of financial and oil sectors and on the back of expectations of economic stimulus measures.

Among other global events, the meeting of the European Central Bank (ECB) on Thursday was watched closely by experts.

"We understand that no decision has been taken to implement Quantitative Easing (QE) by the ECB. The Bank's next meeting will be on January 22 and hopefully by that time a decision can be taken to identify the amount of QE. On the other hand, crude continued to fall lower (more discounts by Saudi Arabia), which increases the risk concerning the world outlook," says Vinod Nair, head, fundamental research, Geojit BNP Paribas.

The week's gainers among the A-Group stocks were Jet Airways (43%), Strides Arcolab (28%), Essar Oil (25%), BEL (26%) and Wockhardt (25%). The major losers were Kailash Auto Finance (28%), Aban Offshore (11%), Kaveri Seed Company (10%), Container Corp (7%) and Crompton Greaves (7%).