Mumbai: The BSE benchmark Sensex extended its gains for the third consecutive week by surging another 133 points during the truncated week on sustained capital inflows coupled with easing of inflation figure though a clutch of CAG reports dented sentiments to some extent.
Shares of oil & gas, auto, consumer durable, capital goods, tech and IT sectors firmed up on good buying enquires while metal, power and FMCG shares fell on selling pressure.
Brokers said the sentiment improved following announcement by market regulator SEBI of wide-ranging steps to reform the mutual fund industry and the IPO space.
However, sentiments turned sour towards the weekend after a Comptroller and Auditor General of India (CAG) report named Jindal Steel, Essar Power, Hindalco, Tata Power and Adani Power amongst firms that gained Rs 1.86 lakh crore from coal blocks allocated on nomination basis.
Two other reports of the government auditor dealt with Delhi airport development and diversion of coal to a private power project in Madhya Pradesh.
The 30-share BSE sensitive index resumed slightly down at 17,551.69 and dropped to a low of 17,522.10 but recovered sharply on Friday to a fresh five-month high of 17,801.39 on renewed hopes of rate cut by the Reserve Bank, following lower-than-expected fall in July inflation numbers.
However, the index dipped to settle the week at 17,691.08 after the CAG said private firms are likely to have gained about Rs 1.86 lakh crore from coal blocks allocated on nomination basis, which amounted to notional loss to national exchequer.
The index was still up 133.34 points, or 0.76 percent. The Sensex has gained 851.89 points, or 5.06 percent, in the last three weeks.
The NSE 50-share Nifty also rose by 45.90 points, or 0.86 percent, to finish at 5,366.30. The Nifty has gained 266.45 points, or 5.22 percent, over the last three weeks.
The government data showed inflation declined to 6.87 percent in July. This was the first time the price rate fell below 7 percent in over 30 months, but the number was still above than the apex bank's comfortable level.
"Inflation number was lower than Street estimates. This moderation raises expectation for some monetary easing steps," said Milan Bavishi, Head Research, Inventure Growth and Securities.
The Foreign Institutional Investors (FIIs) were net buyers of Rs 1,085.02 crore, as per the SEBI's data, including the provisional figure of August 17.
Kishor Ostwal, CMD, CNI Research Ltd, said, "CAG reports seemed to have spoilt the bull party but we believe it is a trend for the market to close on Friday on a weaker note ahead of a good session. The Nifty has closed above 5,360, which is very strong level.
"It can correct at the most till 5,300 in the current situation where there is a very strong support. On upside, it seems 5,500 is capped for the settlement unless the call value shifts from 5,500 to 5,600. The next eight trading sessions need to be watched carefully."
"The strategy for next eight sessions should be - buy on dips and sell on rise - as the market may see volatility between 5,300 and 5,500 due to orthodox roll over system.
"In absence of liquidity in September series, the volatility is must for shifting the positions from August to September. Those with high leveraging will see problem on either side whereas those with lower or nil leveraging will enjoy buy on dips," Ostwal added.
Shares of Tata Motors rose by 3.64 percent after reports said the company's global sales rose. Maruti settled higher by 1.16 per cent after it announced that production will resume at Manesar plant from August 21.
However, the ITC dropped by 2.20 percent on reports that Australia's tough new anti-tobacco marketing laws, which among others ban logos on cigarette packs, may be see similar action in India as well.
Other gainers from Sensex pack were RIL (4.23 percent), M&M (3.85 percent), HDFC (3.24 percent), Bharti Airtel (2.48 percent), Infosys (1.65 percent), Dr Reddy (1.47 percent) and Cipla (1.43 percent) and Wipro (1.23 percent,) while Hindalco Ind fell by 7.21 percent followed by Tata Power 2.60 percent, Sunpharma 2.21 per cent, NTPC 2.09 percent, Jindal Steel 2.00 percent, GAIL 1.92 percent, Tata Steel 1.40 per cent and HDFC Bank 1.14 percent.
Among the sectoral indices, the BSE-Oil&Gas shot up by 2.30 percent followed by BSE-IPO 2.20 percent, BSE-Auto 1.80 percent, BSE-CD 1.75 percent, BSE-CG 1.44 percent, BSE-Teck 1.32 percent and BSE-IT 1.25 percent, while the BSE-Metal dropped by 1.84 percent and BSE-Power by 1.10 percent.
The total turnover, in the shortened week due to holiday on August 15 for 'Independence Day', at BSE and the NSE fell to Rs 8,355.78 crore and Rs 38,697.93 crore, respectively from the last weekend's level of Rs 10,603.40 crore and Rs 51,611.93 crore.