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Friday, 21 November 2014

M&A nudge, global cues boost Sensex 1%; PSBs zoom

After three days of sluggish moves, the Sensex and Nifty were fired up by a bank-led rally, and ended the week at record levels once again. The benchmark Nifty, stopped short of 8,500 mark, ending at 8,477 level and Sensex rose 267 points at 28,334. Both the indices gained 1 percent during the week.

Two major mergers during the week and positive global cues helped market to churn out solid gains.

SBI, Kotak Mahindra Bank, PNB, Bharti Airtel Cipla and Reliance Industries were among the big gainers, climbing 3-10 percent.

Second line shares did well during the week, but investors showed a marked preference for the large cap names.

Among sectors the week cleary belonged to public sector banks (Bank Nifty was up 2.7 percent while PSU Bank index jumped 4 percent) followed by capital goods, infra, auto and FMCG stocks which logged 1-2 percent gains during the week. Metals, realty and consumer durables remained weak.

Investors lapped up huge shares of Kotak Mahindra Bank on Friday after the private sector lender announced the acquisition of mid-sized player ING Vysya Bank in an all-share transaction. The stock rallied as much as 9 percent in early trade to touch a record high of Rs 1,260.90.

Brokerages were largely positive on the Kotak-ING deal with many saying that while it may immediately pressure some of Kotak’s metrics such as return on equity, it would help it in the long term by boosting its presence in the South where ING is focused, as well as by incorporating its SME lending book.

Shares of Tech Mahindra rose 1 percent during the week; hitting an all-time intraday high of Rs 2,741 on Friday post the acquisition of US-based company Lightbridge Communications Corporation (LCC) by the company in in a USD 240 million deal.

Positive global cues lifted world stocks on Friday; comments from European Central Bank (ECB) President Mario Draghi raised expectations for aggressive quantitative easing measures from the ECB going ahead. Also, reassuring data from US lifted the sentiment. Initial U.S. weekly jobless claims fell while factory activity in the mid-Atlantic region grew significantly.

Week ahead

Market is likely to remain volatile next week on account of the futures & options (F&O).

Investors will also eye September quarter GDP data, to be announced on 28 November and current account deficit (CAD) numbers for the same period on Monday, 24.More information please visit this site

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